Grayscale Research has unveiled its updated "Top 20" list of promising altcoins for Q3 2025. The latest iteration sees the addition of Avalanche (AVAX) and MORPHO, replacing Lido DAO (LDAO) and Optimism (OP) from the previous quarter's selection.
Grayscale’s Updated Top 20 Altcoin List
Grayscale Research periodically evaluates altcoins across various crypto sectors, updating its "Top 20" list alongside its "Assets Under Consideration" and sector-specific assessments. The firm employs a multifaceted approach to identify high-potential assets, focusing on market sector performance and individual project developments.
Key Changes in Q3 2025:
- Added: Avalanche (AVAX) and Morpho (MORPHO)
- Removed: Lido DAO (LDAO) and Optimism (OP)
"We have updated the Grayscale Research Top 20. The Top 20 represents a diversified set of assets across Crypto Sectors that, in our view, have high potential over the coming quarter. This quarter's new assets are Avalanche $AVAX](https://twitter.com/search?q=%24AVAX&src=ctag&ref_src=twsrc%5Etfw) and Morpho [$MORPHO."
— Grayscale (@Grayscale) June 26, 2025
Sector Performance and Selection Criteria
Grayscale’s selection process involves analyzing market sectors and individual project metrics. For example:
- LDAO was categorized under "Utilities & Services," the lowest-performing sector, and replaced by MORPHO from "Financials," the second-highest performer.
- AVAX and OP both belong to the smart contract protocols sector, which showed neutral growth. However, Avalanche’s recent partnerships and on-chain activity growth made it a standout choice.
Why AVAX Replaced OP:
- Avalanche: Recorded a surge in on-chain activity due to new partnerships.
- Optimism: Suffered a 54% drop in ETH reserves, and Ethereum’s focus on interoperability may reduce the need for Layer-2 solutions like OP.
Morpho’s Rise and Sector Potential
MORPHO’s inclusion stems from its innovative developments rather than past performance. Grayscale highlighted its potential to disrupt the DeFi lending space:
"This past month, Morpho announced Morpho V2, designed to bring DeFi to traditional financial institutions. Grayscale Research is optimistic about the future of on-chain lending activity, and Morpho seems well positioned to potentially capture a meaningful share of that growth."
👉 Explore DeFi lending platforms
Market Volatility and Investor Caution
Grayscale emphasizes that all listed tokens are highly volatile. Notably, AVAX, MORPHO, OP, and LDAO saw slight price declines post-announcement, underscoring the need for cautious investment strategies.
FAQ Section
1. How often does Grayscale update its Top 20 list?
Grayscale updates its Top 20 list quarterly, alongside its "Assets Under Consideration" and sector-specific reports.
2. Why was Avalanche (AVAX) added to the list?
AVAX replaced Optimism (OP) due to its strong organic growth, partnerships, and rising on-chain activity, despite both belonging to the smart contract protocols sector.
3. What makes MORPHO a standout choice?
MORPHO’s innovative V2 upgrade aims to bridge DeFi with traditional finance, positioning it as a potential leader in on-chain lending.
👉 Discover more about crypto investments
4. Are Grayscale’s recommendations guaranteed to perform well?
No. Grayscale cautions that all listed assets are volatile, and investors should conduct independent research before making decisions.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are inherently risky; always perform due diligence and consult a professional before investing.
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