Grayscale adds 6 cryptocurrencies to its Top 20 list, optimistic about performance next quarter

The cryptocurrency asset management company Grayscale recently released a research report, stating that the cryptocurrency market in the fourth quarter of this year continues the volatility trend from the third quarter. Although there was a slight improvement in the trend at the end of the third quarter, overall market sentiment is noticeably cautious, possibly due to global economic uncertainties, ongoing changes in U.S. regulatory direction, and concerns about policy changes following the presidential election.

The report points out that several emerging technologies may start to ferment in the fourth quarter, such as the rise of AI platforms, tokenization of traditional assets RWA, and the potential continuation of meme coin frenzy. Bitcoin continues to stand strong, while Ethereum lags slightly behind Bitcoin in performance but maintains a solid position due to its large developer community and applications. The research suggests that "policy changes" and "technological innovation" will play important roles in the fourth quarter.

As shown in the chart, the trend in the fourth quarter continues the volatility from the previous quarter, with Bitcoin performing significantly better than Ethereum since January 2023, as well as the Grayscale Crypto Sector Market Index CSMI representing the overall cryptocurrency market. While most competing coins do not perform as well as Bitcoin, new topics like AI platforms, tokenization of traditional assets RWA, and meme coin frenzy have brought gains to the market in the latter half of 2024.

Narrative Overwhelmed, Ethereum Holds Ground

According to the chart, Ethereum's performance in terms of returns this year lags behind Bitcoin, but still leads the overall market, with the Crypto Sector Market Index (CSMI) down 1% this year. Excluding Ethereum, the smart contract platform index dropped by 11%, indicating that Ethereum's asset performance remains at a certain level.

Looking at the indices based on application categories produced by Grayscale, the indices for application tokens, payment tokens, and consumer/culture tokens all did not perform positively.

Grayscale states that Ethereum remains the leader in the smart contract public chain, with the most applications, the most developers, the highest 30-day network fee income, and the most value locked in smart contracts.

Grayscale believes that as the user, transaction, and fee scales of smart contract platforms expand, the market potential is considerable. Ethereum, as a leader in the smart contract field, will be the primary beneficiary as the market matures. Additionally, Ethereum's high stability, security, and endorsement by U.S. regulatory authorities give it a clear advantage when facing competitors.

Currently, the Ethereum ecosystem has seen many exciting technological applications, such as Real World Asset (RWA) tokenization and prediction market application Polymarket, which are all promising for Ethereum's future.

From the following chart, it can be seen that Ethereum's market value still surpasses other smart contract public chains, and its fee revenue stands out. However, compared to Ethereum's high market value, its revenue relative to market value is relatively lower among all public chains.

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Grayscale Bullish on Top 20 Cryptocurrencies: Adds SUI, TAO, OP

Grayscale has also updated its own Top 20 cryptocurrency list, which includes the more promising cryptocurrencies for the upcoming quarter, including SUI, Bittensor TAO, Optimism OP, Helium HNT, Celo CELO, and UMA UMA.

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1. SUI: Developed by a former Meta engineering team, underwent a network upgrade two months ago that increased transaction speed by 80% and surpassed Solana, leading to increased adoption.
2. Bittensor TAO: Dedicated to creating a global decentralized AI platform.
3. Optimism OP: L2 Ethereum scaling solution.
4. Helium HNT: Representative of the decentralized physical infrastructure network DePIN, focusing on network resource allocation, connectivity, and rewarding participants for maintenance.
5. Celo CELO: A blockchain primarily focused on developing stablecoins and payment applications in developing countries.
6. UMA: Provides Polymarket with oracle usage to confirm and record event outcomes, ensuring a fair and decentralized decision-making process.

However, Grayscale also states that these assets have high price volatility and investment risks, especially with the "U.S. Presidential Election" potentially becoming a key factor in market fluctuations. Currently, it appears that Trump has accepted the cryptocurrency industry, while Janet Yellen recently stated that she will encourage innovative technologies such as artificial intelligence and digital assets, while protecting consumers and investors.

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