Grayscale Adds Avalanche and Morpho to Top 20 Crypto List for Q3 2025

Grayscale Asset Management has updated its Top 20 crypto asset list for the third quarter of 2025, adding Avalanche (AVAX) and Morpho (MORPHO) due to their robust ecosystem growth and expansion in the lending protocol sector. This move reflects Grayscale’s strategic focus on on-chain lending and decentralized finance (DeFi), anticipating significant market traction amidst evolving regulatory landscapes.

Avalanche’s inclusion is driven by its surge in transaction volume, attributed to innovative integrations such as the onboarding of the popular video game MapleStory. This integration has boosted user engagement and stablecoin transactions within its ecosystem, signaling Avalanche’s strengthening position as a versatile smart contract platform. Morpho’s addition is due to its status as the second-largest decentralized lending protocol by Total Value Locked (TVL), surpassing $4 billion. The launch of Morpho V2, designed to bridge DeFi with traditional finance, marks a significant step in expanding decentralized lending’s reach.

To accommodate Avalanche and Morpho, Grayscale removed Lido (LDO) and Optimism (OP) from its Top 20 list. The decision to remove Lido reflects growing regulatory uncertainty surrounding staking services, which could adversely impact its fee revenue streams. Meanwhile, Optimism’s token has struggled to translate widespread technological adoption into sustained economic value, prompting Grayscale to reassess its inclusion.

Grayscale’s report also provides a comprehensive overview of the second quarter of 2025 sectoral performance, noting mixed returns across crypto segments. Bitcoin maintained its dominance within the Currencies sector, delivering notable gains. Smart Contract Platforms experienced increased transaction volumes; however, fee revenues declined due to a cooling in memecoin activity. This divergence highlights the nuanced dynamics within blockchain ecosystems, where user engagement does not always correlate directly with revenue generation.

Grayscale identified rising investor interest in decentralized artificial intelligence (AI), DeFi lending, and smart contract platforms despite persistent macroeconomic and regulatory uncertainties. The launch of Grayscale’s AI Crypto Sector, tracking 24 AI-related tokens valued at approximately $15 billion, led by Bittensor (TAO), exemplifies the firm’s commitment to capturing innovation at the intersection of blockchain and AI technologies.

Grayscale’s updated Top 20 list and sectoral insights provide investors with a clear signal of where growth opportunities are emerging within the crypto landscape. The focus on Avalanche and Morpho highlights the increasing importance of scalable smart contract platforms and decentralized lending protocols in driving sustainable ecosystem expansion. Investors should consider the implications of regulatory developments on staking and Layer 2 solutions, as these factors may influence asset performance and portfolio risk profiles. Grayscale’s data-driven approach serves as a valuable guide for market participants seeking to align their strategies with evolving sector trends and technological advancements.

Grayscale’s Q3 2025 Top 20 update underscores a strategic pivot towards assets exhibiting strong on-chain activity and lending protocol growth, with Avalanche and Morpho exemplifying these trends. The firm’s nuanced assessment of regulatory risks and market dynamics ensures its portfolio remains adaptive and forward-looking. As decentralized finance and AI integration continue to reshape the crypto ecosystem, investors are encouraged to monitor these sectors closely to capitalize on emerging opportunities.