SUI, TAO, and OP are some of the cryptocurrencies Grayscale watches.
These cryptocurrencies “have great potential in the quarter,” according to the company.
With the arrival of the fourth quarter of 2024, Grayscale has renewed the quarterly list of the 20 digital assets that it considers to have high performance potential. This company, an issuer of funds in the market, updates said index at the end of each quarter if it considers it necessary and this has not been the exception.
“The top 20 represents a diversified set of assets across all cryptocurrency sectors that, in our opinion, have high potential during this quarter,” he says in a statement. report Grayscale Research, the company’s research arm.
The list is designed to be updated with developments in the digital asset market and is rebalanced at the end of each quarter. With the closing of the third quarter of the year, cryptoassets sui (SUI), bittensor (TAO), optimism (OP), helium (HNT), celo (CELO) and uma protocol (UMA) were added to the list.
The new top assets replaced Render (RNDR), Mantle (MNT), ThorChain (RUNE), Pendle (PENDLE), Illuvium (ILV), and Raydium (RAY). “Grayscale Research continues to see value in each of these projects. However, we believe that the revised top 20 list may offer more attractive risk-adjusted returns for this quarter,” he clarifies.
Meanwhile, bitcoin (BTC), ether (ETH), solana (SOL) and toncoin (TON) remain at the top of the list. Below you can see all the assets in the index.
This year’s cryptocurrency sector updates in the index highlight emerging themes for the digital asset industry. These include the rise of decentralized artificial intelligence (AI) platforms like TAO, efforts to tokenize traditional assets, and the popularity of memecoins.
It should be noted, however, that Grayscale does not include tokenization assets and memecoins in the list, but rather the native currencies of the networks that provide infrastructure to such sectors.
Their approach to selection looks at a number of factors, such as network growth/adoption, upcoming catalysts, sustainability of fundamentals, token valuation, token supply inflation, and potential tail risks.
Cryptocurrency performance stands out in 2024
From the performance point of view, bitcoin and cryptocurrency sector have outperformed other market segments in 2024highlights the Grayscale report. And, when it comes to the cryptoasset niche, BTC has led performance since the start of its current bull cycle almost two years ago, as the chart exhibits.
The superior performance of bitcoin compared to other digital assets reflects, according to Grayscale, the successful launch this year of its exchange-traded funds (ETF) in the US market and a favorable macroeconomic context for the asset. Furthermore, it highlights that it has no competition regarding its essence as a decentralized scarce asset.
Ethereum and other smart contract platforms in the spotlight
“Unlike Bitcoin, which dominates the cryptocurrency sector, Ethereum faces significant competition within the cryptocurrency sector from smart contract platforms,” Grayscale warns.
A number of alternative smart contract platforms have gained traction this year, including Solana, Toncoin, Tron, and Near, as well as newer additions like Sui which launched last year. The homonymous token of this last network registers, as reported by CriptoNoticias, an appreciation of 138% in the last month, the best performance of the main 100 crypto assets.
The growing competition explains the new integrations of its top 20, such as Sui and Optimism for its high-performance network. As for Celo and Uma, he highlights them for facilitating the adoption of stablecoins and prediction markets like Polymarket. Meanwhile, Helium enables decentralized physical infrastructure (DePin) and Bittensor AI apps.
Nevertheless, Although ETH has underperformed BTC so far this year, it has outperformed the smart contract platform sector index. In addition, it continues to be the leader in that category, with the highest number of applications, developers, fee income and locked value.
“Grayscale Research expects the entire cryptocurrency sector of smart contract platforms to grow, in terms of users, transactions and fees, which could benefit all assets in the category,” he says. This also applies to Ethereum.
“Because it is the category leader, it is difficult to imagine a period of sustained growth in the smart contract platform segment that does not benefit Ethereum,” he says. For this reason, although it faces significant competition, in its opinion, Ethereum remains an attractive asset within said sector.
He also adds that at the moment the regulatory environment benefits Ethereum compared to its competition. This is reflected in the approval of its ETFs in the United States, while those of other altcoins are still under evaluation.
The elections in the United States enable high volatility for cryptocurrencies
Grayscale clarifies that all the assets on its list have high price volatility and should be considered high risk. In part, he emphasizes that this comes from regulatory and economic framework uncertainty, as well as the US elections in the United States scheduled for November.
Regarding the elections, Republican candidate and former president Donald Trump has clearly embraced the digital asset industry. Meanwhile, Democratic candidate and Vice President Kamala Harris is striking a calmer tone. He recently said his administration will “foster innovative technologies like AI and digital assets, while protecting consumers and investors.”
This occurs in a scenario of interest rate cuts that increases liquidity, while reflecting weakness in the economy. Therefore, it is possible to see high volatility in the remainder of 2024 depending on economic and political development.
Clarification: This article is written for informational purposes. It does not constitute financial advice or investment recommendation.