Grayscale Adds Avalanche Morpho to Top 20 Altcoins List

Grayscale has updated its Top 20 Altcoins list for the third quarter of 2025, introducing Avalanche (AVAX) and Morpho (MORPHO) while removing Lido DAO (LDO) and Optimism (OP). This revision reflects recent shifts in market activity and protocol performance, focusing on assets with high growth potential over the next quarter. The update follows an internal review of sector fundamentals, adoption trends, and technical performance, with all listed assets continuing to carry high volatility and risk.

Avalanche earned its spot on the list due to increased adoption and user activity within its ecosystem. Grayscale highlighted a recent surge in transaction volume, partially driven by gaming-related stablecoin flows. These developments suggest organic growth, which Grayscale views as a positive indicator of Avalanche’s current market strength. Avalanche ranks among the top smart contract platforms by market cap, and while competition in the sector remains strong, the latest activity spike set it apart. Grayscale noted that while it’s unclear if this momentum will hold, the current growth signals notable traction within its network.

Morpho, an Ethereum-based lending protocol, also joined the updated list following strong performance metrics and a strategic expansion. The protocol now ranks as the second-largest decentralized lending platform by Total Value Locked (TVL), surpassing $4 billion. Grayscale’s report emphasized Morpho’s simple design and rapid growth in annualized fee revenue, which has approached $100 million. The recent launch of Morpho V2, aimed at bringing decentralized lending to traditional finance, further strengthened its inclusion. Its growing footprint positions Morpho as a potential leader in the on-chain lending space.

Grayscale removed Lido DAO and Optimism despite both being critical to the Ethereum ecosystem. Lido faced headwinds due to regulatory shifts that may favor centralized staking options, weakening its near-term positioning. Meanwhile, Optimism’s token saw reduced reserves and limited fee returns, raising concerns about short-term value accrual. Although both assets still hold long-term importance, Grayscale cited uncertainty around their immediate outlooks as the main reason for their removal. The firm reiterated that all assets in its Top 20 list are high risk and should be approached cautiously.

Grayscale emphasized that investment decisions should consider not just fundamentals but also timing, macroeconomic conditions, and regulatory changes. The update reflects the dynamic nature of the cryptocurrency market, where shifts in user activity, regulatory environments, and technological advancements can significantly impact the performance and ranking of various assets. The inclusion of Avalanche and Morpho, along with the removal of Lido DAO and Optimism, underscores Grayscale’s focus on identifying assets with strong growth potential and strategic importance within the evolving crypto landscape.