Grayscale: Top 20 encryption assets to follow in Q2 2025

Key points of this article:

• According to the data from the FT / Grayscale Cryptocurrency Industry Index Series, the cryptocurrency market experienced a pullback in the first quarter of 2025, while technology stocks and other risk assets also performed poorly.
• In the first quarter, the Bitcoin network activity indicators were generally healthy. In contrast, as meme coin trading on Solana slowed down, the usage of smart contract platforms declined. Among the five major cryptocurrency sectors we divided, blockchain applications accounted for three; these sectors generated over $2 billion in revenue during the quarter.
• We have updated the Grayscale Research top 20 assets list. This top 20 list covers a diversified range of assets across multiple sectors of the crypto industry, which we believe have high potential in the upcoming quarters. New assets this quarter include Maple (SYRUP), Geodnet (GEOD), and Story Protocol (IP). All assets in our top 20 list exhibit high price volatility and should be considered high-risk assets.

Currently, the number of tokens in the entire digital asset industry (excluding non-fungible tokens) has exceeded 40 million. To comprehensively track this field, Grayscale Research has divided the market into five different cryptocurrency industry sectors based on the actual usage of the underlying software (see Chart 1). Investors can monitor the performance of each sub-market through our cryptocurrency industry index series developed in collaboration with FT/Russell. As of our most recent index rebalancing, the cryptocurrency industry framework now covers 227 different assets with a total market capitalization of $2.6 trillion, accounting for approximately 85%-90% of the estimated total market capitalization of cryptocurrencies.

Chart 1: The cryptocurrency industry segment divides digital assets into five sub-markets

In the first quarter of 2025, the valuation of cryptocurrencies fell sharply, while at the same time, the valuations of tech stocks and risk assets in general also declined (Chart 2). Our market capitalization-weighted cryptocurrency industry price index covering the entire sector dropped by 18% this quarter (as of Friday, March 21). Bitcoin and some other components in the “currency” sector of the cryptocurrency space saw smaller declines, with some even experiencing price increases (for example, Ripple). The worst-performing segment this quarter was the “consumption and culture” sector, mainly due to the price drop of Dogecoin and other meme coins.

Chart 2: Cryptocurrency Valuation Decrease in Q1 2025

In the first quarter of 2025, various indicators of Bitcoin network activity performed well overall (for a summary of fundamental indicators in the cryptocurrency industry, see the chart below, Chart 6). For example, the number of addresses with a balance greater than or equal to $1—a rough measure of demand from “long-term holders (hodlers)”—reached a new high of 48 million. In contrast, the number of monthly active on-chain users remained roughly flat compared to the previous quarter, at 11 million. The widening gap between these two indicators suggests that the recent demand for Bitcoin is likely coming from users viewing it as a “store of value” rather than a “medium of exchange” (Chart 3). In the first quarter of 2025, Bitcoin’s hash rate increased to nearly 800 EH/s, meaning that a network of 5 to 6 million Bitcoin mining machines globally attempts about 800 quintillion (10 to the power of 18) calculations per second to solve the proof-of-work algorithm.

Chart 3: The number of Bitcoin “long-term holders” is steadily increasing

At the beginning of 2025, the fundamental indicators of smart contract platforms in the cryptocurrency sector generally declined, largely due to the decrease in Meme coin trading activity on the Solana blockchain. Although Meme coins do not claim to offer practical functionality in the real world and may carry extremely high risks for investors, the interest in Meme coin trading may have introduced new users to the Solana ecosystem. According to data from Token Terminal, the number of monthly active users on Solana reached 140 million by the end of the fourth quarter of 2024, averaging close to 90 million per month in the first quarter of 2025 (Chart 4). Even though Meme coin trading has slowed down, Solana still generated approximately $390 million in fees in the first quarter of 2025, which accounts for nearly half of the expected total fees for smart contract platforms.

Chart 4: Solana’s monthly active users peaked at around 140 million.

The Grayscale cryptocurrency industry framework divides application-related crypto assets into three categories: financial, consumer and cultural, and utilities and services. These segments cover all components of on-chain economic activity, including user-facing applications, related application infrastructure (such as oracles and cross-chain bridges), and dedicated blockchains. As such, this category is highly diverse, and we believe it is best to evaluate these assets by referring to a segmented peer group focused on specific use cases. That said, for the subset of assets within our three application-layer cryptocurrency industry categories, we estimate their total fees to be approximately $2.6 billion, which represents a 99% increase compared to the first quarter of 2024 (Chart 5).

Chart 5: Blockchain applications with quarterly fees exceeding $2 billion

Chart 6 displays some key fundamental statistics in the segmented areas of the digital asset market. Overall, these indicators show robust growth compared to a year ago, but the changes over the past quarter are more complex, with both increases and decreases.

Chart 6: Blockchain applications with quarterly transaction fees exceeding 2 billion dollars

Grayscale Research Top 20 Cryptocurrency Assets

Every quarter, the Grayscale Research team analyzes hundreds of digital assets to provide a reference for the rebalancing process of the FTSE/Grayscale Cryptocurrency Industry Index Series. Through this process, Grayscale Research generates a list of the top 20 assets in the cryptocurrency industry. This top 20 list represents a diverse range of assets within the cryptocurrency industry that we believe have high potential in the upcoming quarters (Chart 7). Our evaluation method takes into account a range of factors, including network growth and adoption, upcoming catalysts, the sustainability of fundamentals, token valuations, token supply inflation rates, and potential tail risks.

In the past quarter, the emerging asset cases on the blockchain application layer (rather than the infrastructure layer) have greatly encouraged Grayscale Research. This quarter, we focus on tokens that reflect the non-speculative applications of blockchain technology in the real world, which can be categorized into three types: tokenization of real-world assets (RWA), decentralized physical infrastructure (DePIN), and intellectual property (IP).

1. Maple (SYRUP): The Maple protocol is a decentralized finance (DeFi) protocol that focuses on institutional lending through its two core platforms—the Maple institutional platform (for accredited investors) and the Syrup.fi platform (for native DeFi users). The total value locked (TVL) in the protocol has grown to over $600 million, and its annualized network fee revenue has reached $20 million in the past 30 days. The goal of the Maple protocol is to increase the total value locked in the Syrup.fi platform to $2 billion by 2025 through integration with other DeFi protocols such as Pendle. It also aims to become a trusted initiator in the institutional lending space by establishing partnerships with traditional financial institutions.

2. Geodnet (GEOD): Geodnet is a decentralized physical infrastructure network (DePIN) project that focuses on collecting real-time location data. As the world’s largest real-time dynamic location (RTK) provider, geonetworks are able to provide geospatial data with an accuracy of up to 1 centimeter, providing an affordable solution for users such as farmers. In the future, Geodnet is likely to offer an attractive value proposition for autonomous vehicles and robotics. The network has expanded to 130 countries, deployed more than 14,000 devices, and has surpassed $3 million in annualized network fee revenue over the past 30 days (approximately 500% year-over-year). It is worth noting that compared to many other assets in the top 20 by market capitalization, Geodnet (GEOD) has a lower market cap and a narrower range of exchanges for listings. As a result, it can be considered a riskier asset.

3. Story (IP): The Story protocol is attempting to tokenize the $70 trillion intellectual property (IP) market. In the age of artificial intelligence, proprietary intellectual property is being used to train AI models, leading to allegations of copyright infringement and large-scale lawsuits, such as the New York Times vs. OpenAI case. By putting intellectual property on the blockchain, the Story protocol enables companies to monetize their IP when it is used for AI model training, while also allowing individuals to invest in, trade, and earn royalties from intellectual property. The Story protocol has already put songs from Justin Bieber and BTS on the blockchain and launched its IP-focused blockchain and tokens in February.

We believe that the progress made by the three emerging non-speculative use cases listed above reflects a positive sign of the cryptocurrency industry’s maturity.

Chart 7: Our updated top 20 now includes SYRUP, GEOD, and IP.

In addition to the new topics mentioned above, we remain excited about the themes from the previous few quarters, such as Ethereum scaling solutions, the integration of blockchain and AI development, as well as decentralized finance (DeFi) and staking solutions. These themes are represented by protocols that have re-entered the top 20, such as Optimism, Bittensor, and Lido DAO.

This quarter, we have removed the following projects from the top 20: Akash, Arweave, and Jupiter. Grayscale Research still believes that each of these projects has value and that they remain important components of the crypto ecosystem. However, we believe that the revised top 20 list may provide more attractive risk-adjusted returns in the upcoming quarter.

Investing in the cryptocurrency asset class involves risks, some of which are unique to the cryptocurrency asset class, including smart contract vulnerabilities and regulatory uncertainty. Additionally, all assets in our top 20 have high volatility and should be considered high-risk assets, making them unsuitable for all investors. Given the risks associated with the cryptocurrency asset class, any investment in digital assets should be considered in the context of the overall portfolio and with full consideration of the investor’s financial goals.

Index Definition: The FTSE/Grayscale Crypto Sectors Index (CSMI) measures the price returns of digital assets listed on major global exchanges. The FTSE Grayscale Smart Contract Platforms Crypto Sector Index aims to measure the performance of crypto assets that serve as underlying platforms, where automated contracts are developed and deployed. The FTSE Grayscale Utilities and Services Crypto Sector Index aims to measure the performance of crypto assets that are designed to provide practical enterprise-level applications and functionalities. The FTSE Grayscale Consumer and Culture Crypto Sector Index aims to measure the performance of crypto assets that support consumer-centric activities in various goods and services. The FTSE Grayscale Currencies Crypto Sector Index aims to measure the performance of crypto assets that possess at least one of the following three fundamental functions: store of value, medium of exchange, and unit of account. The FTSE Grayscale Financials Crypto Sector Index aims to measure the performance of crypto assets that seek to provide financial transactions and services.