Top 20 Cryptocurrencies to Watch in Q4
Crypto asset manager Grayscale has published a detailed report outlining the sectors poised for bullish growth in the final quarter of the year amid a remarkable recovery in the cryptocurrency market, particularly for major players like Bitcoin (BTC) and several altcoins, which have reached price levels not seen in over two months. Grayscale highlights key trends in the crypto sector
In its Thursday report, Grayscale updated its crypto sector indices, showcasing emerging themes within the digital asset industry.
Key trends include the rise of decentralized artificial intelligence (AI) platforms, efforts to tokenize traditional assets, and the growing popularity of memecoins.
Notably, Bitcoin and the cryptocurrency sector have outperformed other market segments in 2024, likely due to the successful launch of spot Bitcoin exchange-traded products (ETPs) in the US earlier this year and favorable macroeconomic conditions following the Federal Reserve (Fed) interest rate cut on September 18. While it has gained 13% this year, Ethereum has underperformed Bitcoin but still outperformed many other cryptocurrencies.
Grayscale’s Crypto Sectors Market Index (CSMI) has seen a slight decline of about 1% year-to-date, and the Smart Contract Platform Crypto Sectors Index is down about 11%, making Ethereum’s performance relatively stronger than its peers. Despite its challenges, the asset manager believes Ethereum remains the leader in the smart contract platform sector, with the largest number of applications, developers, and fee revenue.
Top 20 Cryptocurrencies for the Next Quarter
To compile its quarterly list of the top 20 cryptocurrencies, Grayscale takes an in-depth look at hundreds of digital assets.
This list represents a diversified selection of assets with high potential for the coming quarter.
Among the assets highlighted by the firm are Sui (SUI), Bittensor (TAO), Optimism (OP), Helium (HNT), Celo (CELO) and UMA Protocol (UMA).
However, below is the full list with other assets beyond these that Grayscale is paying special attention to. Sui, a third-generation blockchain created by former Meta engineers, has generated buzz following a recent network upgrade that improved its transaction speed by 80%, surpassing the capabilities of Solana.
Optimism, an Ethereum layer-2 solution, plays a pivotal role in scaling the Ethereum network. It has developed a framework called “Superchain,” which is used by platforms like Coinbase’s layer-2 BASE. Celo and UMA are taking advantage of unique trends.
Celo focuses on the use of stablecoins and payment solutions in developing regions, particularly in Africa. The platform recently surpassed Tron in stablecoin usage, while UMA functions as an oracle network for decentralized applications such as Polymarket.
Helium’s inclusion in the Top 20 reflects Grayscale’s preference for category leaders with sustainable revenue models. The project has established itself as a leader in decentralized physical infrastructure networks (DePIN), growing its network to over one million access points and generating significant fee revenue.
Bitensor, which focuses on the intersection of AI and cryptocurrencies, has recently gained recognition within the Grayscale framework due to improvements in market structure, offering a decentralized platform for AI innovation.
In this quarter’s adjustments, Grayscale has divested several assets, including Render, Mantle, ThorChain, Pendle, Illuvium, and Raydium. While Grayscale sees value in these projects, the revised top 20 list aims to offer more attractive risk-adjusted returns for investors in the coming months.
At the time of writing, the biggest gainer across all time frames on Grayscale's top 20 list is Bittensor's TAO token, which has seen gains of 86% over the fourteen-day period and a substantial 841% year-to-date, resulting in a current trading price of $536.