Grayscale has listed the 20 most promising tokens for the third quarter.

Author: Grayscale

Translation: Luffy, Foresight News

Key Points:

• Our Crypto Sectors analysis framework shows that despite the significant rise in Bitcoin prices this year, the performance of crypto asset categories has been uneven. Similar to the securities market, the rise in cryptocurrency this year has mainly been reflected in a few currencies.
• We have launched the Grayscale Research Top 20, which consists of tokens with high potential for the next quarter. These crypto assets were selected based on the comprehensive evaluation by the Grayscale Research team of upcoming catalysts, market trends, and token-specific fundamentals. It should be noted that several assets in our Top 20 list have high price volatility and should be considered high-risk assets.
• With the potential approval of Ethereum ETP, we expect the third quarter to focus on the Ethereum ecosystem.

Exploring crypto asset categories can be challenging, which is why Grayscale has created a framework for analyzing the cryptocurrency industry. This is a comprehensive framework for understanding the full range of investable crypto assets and their relationship with underlying technologies. The framework provides investors with commonly used tools comparable to traditional markets to better understand and explore the evolving crypto asset categories.

Our crypto industry analysis framework divides the crypto asset field into five different subcategories: (i) currency, (ii) smart contract platforms, (iii) finance, (iv) consumer and culture, and (v) public utilities and services (Figure 1). Tokens in these five categories are associated with unique use cases and investment risks. Therefore, their valuation is influenced by different fundamentals and technology-driven factors.

Figure 1: The cryptocurrency industry analysis framework divides the digital asset market into five parts

Small increase in cryptocurrency prices this year

Since the beginning of 2024, despite a 50% increase in Bitcoin prices, our Cryptocurrency Industry Market Index (CSMI) has actually fallen by about 3% (Figure 2). The assets in the five crypto industry categories and the total CSMI are square root weighted by their market value to reduce Bitcoin's dominance and better represent the overall performance of crypto assets. Weighted by market value, the CSMI has grown by 30%, reflecting significant growth in Bitcoin and its substantial share in total market value (about 60%). Among the five segmented markets, the currency category has performed the best (reflecting Bitcoin's outstanding performance), while the consumer and culture category has performed the worst, mainly due to the weakness of assets related to video game applications this year.

Figure 2: Despite the significant rise in Bitcoin, cryptocurrency performance has been uneven this year

The significant difference in returns between Bitcoin and the broader cryptocurrency market indicates a lack of breadth in this year's rise. Similar to the US stock market, a few large tech companies have recently dominated index returns. Using the cryptocurrency industry analysis framework, we can create a market breadth indicator similar to those applied in other markets. For example, Figure 3 shows the "up/down" index, where we track the net percentage of token price increases and decreases in the analysis framework each day, and then calculate the cumulative total over a period of time. According to this indicator, cryptocurrency market breadth peaked at the end of March/beginning of April 2024 and has been declining since. Despite the significant rise in Bitcoin this year, only about 30% of cryptocurrency prices in our analysis framework have actually increased.

Figure 3: Market breadth has been declining since April

A relative bright spot is the cryptocurrency assets related to artificial intelligence (AI), which are mainly concentrated in the smart contract platform and public utilities and services categories.[2] These protocols aim to address AI-related issues (such as robots and deep fakes, privacy, model verification), provide essential resources for AI development (such as computing, storage, data), or offer a general platform for AI-related services (for more detailed information, please refer to our report). Year-to-date, AI-related cryptocurrency assets have risen by 80% compared to a slight decline in the overall cryptocurrency market (Figure 4).

Figure 4: Tokens related to artificial intelligence have performed well

In addition to artificial intelligence, market participants are also focusing on several other themes, which have to some extent affected the relative performance of our five cryptocurrency categories. To help us understand market trends, Grayscale Research has adopted Kaito, a data provider's "narrative mindshare" index. These data measure the relative frequency of social media mentions of specific cryptocurrency market themes or narratives, helping to assess cryptocurrency assets driven by communities of believers and supporters who often express their views on social media platforms. For example, in the past month, artificial intelligence remains a dominant theme; followed by exchange-traded funds (ETFs), whose approval could be a short-term market catalyst; meme coins and blockchain-based games are also hot topics (Figure 5). While market focus may change, themes tend to be enduring, so the narrative mindshare index may provide clues for market performance in the coming months.

Figure 5: Artificial intelligence remains the most important theme

Looking ahead: Focus on the Ethereum ecosystem

For the next quarter, Grayscale Research expects the cryptocurrency market to be influenced by the approval of Ethereum Exchange-Traded Products (ETPs) in the US market. At the end of May, the US Securities and Exchange Commission (SEC) approved 19b-4 form applications from multiple issuers to list these products on US exchanges. In addition, SEC Chairman Gensler recently stated that regulatory agencies may "approve the remaining applications at some point this summer." Therefore, although the timing is still uncertain, for market analysis purposes, Grayscale Research assumes that these products will begin trading in the third quarter of 2024. Similar to the launch of the Bitcoin ETP in January 2024, the Grayscale Research team expects these new Ethereum products to bring meaningful net inflows of funds (although less than the Bitcoin ETP), potentially supporting the valuation of tokens within the Ethereum ecosystem (for more detailed information, please refer to our report "The State of Ethereum").

The Ethereum ecosystem has several unique features, and the launch of Ethereum Exchange-Traded Products (ETPs) in the US market may highlight these features. For example, the Ethereum network is implementing a modular design concept where different components of blockchain infrastructure work together to provide a more optimized end-user experience and reduce costs. Additionally, Ethereum is the hub of the largest decentralized finance (DeFi) ecosystem in the crypto space and the home to most tokenized projects (for more detailed information, please refer to our report "Public Blockchains and the Tokenization Revolution"). If the approval of ETPs stimulates interest and adoption of Ethereum, we may also see increased activity and valuation of tokens from Layer 2 projects (such as Mantle), Ethereum DeFi protocols (such as Uniswap, Maker, and Aave), and other assets crucial to the operation of the Ethereum network (such as Lido, a staking protocol).

In addition to the approval of the US Ethereum ETP, Grayscale Research expects various current market themes to continue to receive attention in the next quarter, especially the potential intersection between blockchain technology and artificial intelligence. One asset in this category is Near, whose founder is a co-founder of the "Transformer" architecture, which provides support for artificial intelligence systems like ChatGPT. In terms of daily active users, Near is one of the top smart contract platforms and has gained widespread practical applications in non-financial use cases. However, recently, Near, leveraging its expertise in artificial intelligence, announced the development of "user-owned AGI" through a research and development department led by a former OpenAI research engineer advisor. The market's continued preference for artificial intelligence may also benefit decentralized GPU markets like Render and Akash.

In addition to major market themes, various projects seem to benefit from their own unique adoption trends, whether due to innovative technology or integration with platforms that provide user growth space. Two notable examples are Toncoin and Pendle. The TON blockchain is a smart contract platform tied to the Telegram messaging platform, with users, transactions, and fee revenue all experiencing significant growth. Pendle Finance is a relatively new DeFi protocol that allows users to customize the performance of their strategies. While not a new trend, we also believe that the Solana network is experiencing organic adoption growth, thanks to its notable user experience.

Finally, the cryptocurrency market may continue to differentiate between tokens with relatively low supply inflation and those with relatively high supply inflation. Although Bitcoin has reached its maximum total supply and has a relatively low annual inflation rate, many tokens in our analysis framework do not have this structure. In fact, the circulating supply of many tokens is relatively low, while the monthly or annual supply inflation ("unlocking") is relatively high. In these cases, even if projects are experiencing user adoption and revenue growth, the growth in supply may dilute the stakes of existing token holders. Examples of this include well-known Ethereum Layer 2 networks like Arbitrum and Optimism, where despite high user adoption rates, the returns of native tokens are relatively poor, possibly due to rapid growth in circulating supply.

Introduction to Grayscale Research Top 20

To highlight specific high-potential tokens in the crypto industry, we have launched the Grayscale Research Top 20 (Figure 6). The Top 20 represents a diversified portfolio of crypto assets that we believe have high potential for the next quarter due to a combination of (i) direct catalysts or trending themes, (ii) favorable protocol adoption trends, and (iii) low or moderate token supply inflation. The selection of these assets represents the near-term market outlook, and therefore may exclude higher market cap assets without direct catalysts or continuously improving fundamentals. We intend to update the Grayscale Research Top 20 list quarterly. Please note that several assets in the list have high volatility (as indicated in the rightmost column of Figure 6) and should be considered high-risk assets.

Figure 6: High-potential assets for the third quarter of 2024

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。