Grayscale’s Top 20 Crypto Picks: Why Avalanche and Morpho Made the List

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The latest update to Grayscale’s Top 20 crypto assets for Q3 2025 has sparked renewed interest in the evolving criteria behind institutional-grade digital asset selection. Notably, Avalanche (AVAX) and Morpho have been added to the list, replacing Optimism and Lido DAO, signaling a shift toward projects demonstrating real on-chain traction rather than relying solely on market capitalization or brand recognition.

This strategic refinement underscores Grayscale’s research-driven approach—prioritizing ecosystems with measurable growth, developer activity, and sustainable use cases. As the crypto market matures, such institutional insights offer valuable guidance for both retail and professional investors navigating an increasingly complex landscape.

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What’s New in Grayscale’s Q3 2025 Crypto Rankings?

Grayscale’s updated Top 20 list reflects a deliberate focus on on-chain performance, ecosystem expansion, and real-world utility. The inclusion of Avalanche and Morpho highlights two distinct but equally compelling narratives: one rooted in scalable infrastructure, the other in decentralized finance innovation.

The excluded assets—Optimism and Lido DAO—were not necessarily deemed weak; rather, Grayscale emphasized that their current momentum and growth catalysts lag behind newer entrants. This dynamic curation process ensures the list remains forward-looking, favoring assets with strong fundamentals and upcoming development milestones.

Among the established names still featured are Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Chainlink (LINK), and Sui (SUI)—all recognized for their foundational roles in the blockchain ecosystem. Meanwhile, DeFi protocols like Aave, Uniswap, and Hyperliquid continue to hold positions, now joined by emerging players such as Bittensor, Ethena, Story Protocol, Aerodrome, and Geodnet.

This blend of proven performers and high-potential innovators illustrates a balanced strategy: preserving exposure to core digital assets while actively scouting for next-generation technologies.

Why Avalanche (AVAX) Earned a Spot

Avalanche’s resurgence in ecosystem activity was a key factor in its re-entry into Grayscale’s Top 20. The platform has seen a significant uptick in transaction volume, driven by growing adoption across multiple sectors:

These developments point to a broader trend: developers and users are increasingly choosing Avalanche for its high throughput, low latency, and customizable network architecture.

Grayscale highlighted that while the sustainability of this growth remains to be seen, the current momentum suggests meaningful network engagement beyond speculative trading. The rise of subnet-based applications—particularly in gaming and asset tokenization—adds tangible utility to AVAX’s value proposition.

Moreover, partnerships with major financial institutions and cloud providers have strengthened Avalanche’s position as a scalable solution for real-world asset (RWA) tokenization and decentralized identity systems.

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Morpho’s Rise: A DeFi Lending Powerhouse Emerges

Morpho, a decentralized lending protocol built atop existing markets like Aave and Compound, has rapidly gained traction due to its capital efficiency model and user-centric design.

In the past year alone:

Unlike traditional lending protocols that operate independently, Morpho optimizes liquidity by creating peer-to-peer or peer-to-pool markets atop existing pools. This allows borrowers and lenders to achieve better rates while maintaining security through underlying protocols.

Grayscale noted that Morpho’s hybrid approach could play a pivotal role in the evolution of decentralized finance, particularly as demand grows for more efficient capital utilization and yield optimization tools.

“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.”

With growing interest from institutional players and integrations into major DeFi dashboards, Morpho represents a new wave of innovation focused on improving existing infrastructure rather than reinventing it.

Why XRP, ADA, BNB, and TRON Were Left Out

Despite their large market caps and widespread recognition, several prominent assets—including XRP, Cardano (ADA), BNB, and TRON—remain absent from the list.

Grayscale clarified that inclusion is not determined by popularity or exchange volume but by:

While Ripple has made strides with enterprise partnerships—such as its integration with Wormhole to enhance cross-chain capabilities on the XRP Ledger—these developments have not yet translated into proportional network usage or price momentum.

Similarly, Cardano has advanced its Layer-2 roadmap and announced plans to integrate Bitcoin into its DeFi ecosystem. However, execution speed and ecosystem maturity still lag behind competing platforms.

Market data further supports this decision:

This underperformance amid a broadly bullish market suggests weaker investor confidence or slower adoption relative to peers.

Ultimately, Grayscale’s exclusion reflects a cautious stance: promising roadmaps matter, but measurable results matter more.

Core Keywords Driving This Analysis

The central themes shaping this evaluation include:

These keywords naturally emerge throughout the narrative, aligning with search intent around institutional crypto analysis, asset evaluation frameworks, and emerging blockchain trends.

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Frequently Asked Questions (FAQ)

Q: Why did Grayscale add Avalanche to its Top 20 list?
A: Avalanche was included due to significant growth in transaction volume, increased stablecoin usage, and expanding adoption in gaming and enterprise subnets—indicating strong on-chain traction.

Q: What makes Morpho different from other DeFi lending platforms?
A: Morpho enhances existing lending markets (like Aave and Compound) by enabling direct lender-borrower matching, improving capital efficiency and offering better rates without compromising security.

Q: Is market cap the main factor in Grayscale’s selection process?
A: No. While market cap is considered, Grayscale prioritizes on-chain activity, ecosystem development, technological innovation, and institutional adoption over size alone.

Q: Could XRP or Cardano be added in future updates?
A: Yes. If either asset demonstrates sustained network growth, stronger fundamentals, or new catalysts that drive real usage, they could qualify for future inclusion.

Q: How often does Grayscale update its Top 20 list?
A: The list is reviewed quarterly, allowing for timely adjustments based on changing market conditions, technological progress, and macroeconomic factors.

Q: Are stablecoins included in Grayscale’s Top 20?
A: Not currently. The list focuses on native blockchain assets and protocols with governance or utility functions; however, stablecoin integration within ecosystems (like USDC on Avalanche) is factored into overall assessments.

This updated ranking reaffirms a critical principle in modern digital asset investing: long-term viability depends not on hype, but on measurable adoption, technical execution, and resilient network effects.