Grayscale recently released its industry report for Q1 2025, which not only pointed out that Ethereum's performance lags behind Solana, but also indicated that investors are increasingly focusing on altcoins like Sui and Ton. Additionally, this time, Grayscale's top 20 cryptocurrencies have undergone significant changes, adding HYPE, ENA, VIRTUAL, JUP, JTO, GRASS, and others. The long-standing DeFi protocols Maker, Stacks, UMA, TON, NEAR, and CELO have been removed.
Trump wins election promotes a great fourth quarter
Grayscale stated that the strong performance in the fourth quarter is largely attributed to Trump's victory in the US election. According to Grayscale's Cryptocurrency Industry Market Index (CSMI), the total market capitalization of the industry increased from $1 trillion to $3 trillion this quarter. This market share is roughly equivalent to the market value of bonds linked to global inflation, more than double that of the US high-yield bond market, but still significantly smaller than the global hedge bond market or the Japanese stock market.
Grayscale highlights ETH, SOL, SUI, and OP as leaders in the altcoin competition
Returning to the competition among smart contract platforms, despite Ethereum's Cancun upgrade and its approval for a US ETF, token performance still lagged behind the third-largest market cap, Solana, the high-performance public chain Sui, and TON backed by Telegram.
One way to measure the value of smart contract platforms is through network fee revenue. Although other indicators like TVL are also important, Grayscale believes that fee revenue is the key for public chains. There is a positive correlation between smart contract platform fee revenue and market capitalization. As the ability to generate fee revenue increases, the ability to transfer value to the network in the form of token burn or staking rewards also strengthens. This is why Grayscale highlighted ETH, SOL, SUI, and OP in Q1.
Source: Grayscale What to watch in Q1? AI, Solana, and DeFi
Looking ahead to Q1 2025, Grayscale will focus on tokens related to the following three key points:
The US election and its potential impact on industry regulation, particularly in the areas of decentralized finance (DeFi) and staking;
The ongoing breakthroughs in decentralized AI technology and the use of AI agents on blockchain;
The growth of the Solana ecosystem.
Grayscale highlights six major cryptocurrencies
Hyperliquid (HYPE): Hyperliquid is a Layer 1 blockchain primarily focused on DeFi. Its main application is a decentralized exchange for perpetual futures, along with a fully on-chain order book.
Ethena (ENA): The Ethena protocol issues a new type of stablecoin, USDe, primarily profiting from arbitrage of collateral consisting of Bitcoin and Ether.
VIRTUAL: Virtual Protocol is a platform for creating AI agents on the Base chain. These AI agents mimic human decision-making and autonomously execute tasks. Users can create AI agents using VIRTUAL tokens on this platform and tokenize them.
Jupiter (JUP): Jupiter is the largest DEX aggregator on Solana, boasting the highest TVL on Solana. Grayscale expects that as more retail investors enter the cryptocurrency market through Solana and with the thriving memecoins and AI agent tokens on Solana, Jupiter will be in a favorable position.
Jito (JTO): Jito is a liquidity staking protocol on Solana, which has seen a significant increase in adoption over the past year, impressively achieving over $550 million in fee revenue in 2024.
Grass (GRASS): Grass is a decentralized data network that rewards users for sharing unused network bandwidth through a Chrome extension. This bandwidth is used to scrape online data, which is then sold to AI companies and developers for training machine learning models, effectively conducting web data scraping while compensating users.
This article marks the release of Grayscale's Q1 2025 market outlook! New additions include HYPE, ENA, VIRTUAL, and a host of Solana protocols, first appearing in Chain News ABMedia.
