Grayscale’s Cryptocurrency Industry Framework Shows Mixed Performances of the Entire Asset Class
Despite a significant increase in Bitcoin prices, our cryptocurrency industry framework shows mixed performances of the entire asset class so far this year. Similar to the stock market, cryptocurrency returns this year lack breadth.
We are pleased to introduce the top 20 tokens that Grayscale Research is focusing on, which are high-potential tokens selected for the next quarter. These crypto assets are chosen based on the Grayscale research team’s considerations of upcoming catalysts, trending market themes, and specific token fundamentals. Some assets in our top 20 list have high price volatility and should be considered high-risk.
As the approval of Ethereum ETP spot is likely, we expect to focus on the Ethereum ecosystem this quarter.
Exploring the cryptocurrency asset class can be challenging, which is why Grayscale has created Crypto Sectors—a comprehensive framework for understanding all investable cryptocurrency assets and their relationship with their underlying technology. Crypto Sectors provides investors with a roadmap equivalent to common tools in traditional markets, aiming to help investors better understand and navigate the evolving cryptocurrency asset class. Additionally, we have partnered with FTSE Russell to develop the FTSE Grayscale Cryptocurrency Industry Index Series to measure and monitor the cryptocurrency market.
Grayscale Crypto Sectors divides the digital asset space into five different parts: (i) Currency, (ii) Smart Contract Platforms, (iii) Financial, (iv) Consumer & Culture, and (v) Utilities & Services. Tokens in the five crypto industries are related to unique use cases and investable risks.
The cryptocurrency market performance has been lackluster so far this year, with the Grayscale Cryptocurrency Industry Market Index (CSMI) actually declining by about 3% despite Bitcoin’s 50% price increase. The assets of the five crypto industries and the total CSMI are weighted by the square root of their market capitalization to reduce Bitcoin’s dominance and better represent the broader assets of the entire industry.
In the next quarter, we expect the cryptocurrency market to be impacted by the approval of the US spot Ethereum Exchange-Traded Products (ETP). The Grayscale Research team also anticipates meaningful net inflows from these new Ethereum products, potentially supporting the valuation of Ethereum and its underlying tokens.
Looking at the future, Grayscale Research expects that various market themes will continue to be the focus in the next quarter, especially the potential intersections between blockchain technology and artificial intelligence.
In order to highlight high-potential tokens in specific cryptocurrency industries, we have launched the Grayscale Research Top 20 tokens. These assets represent the diversified assets of the cryptocurrency industry and have high potential for the next quarter, with low or moderate token supply inflation. We intend to update the Grayscale Research Top 20 list every quarter.
Reference
[1] The FTSE Grayscale Cryptocurrency Industry Index Series was re-adjusted as scheduled on June 21.
[2] Grayscale Research believes that the cryptocurrency industry tokens related to AI technology may be listed as AGIX, AKT, AR, FET, FIL, GLM, LPT, NEAR, OCEAN, PRIME, RNDR, RSS3, TFUEL, THETA, TRAC, and WLD, in alphabetical order.
[3] Source: CoinTelegraph.
[4] Source: Near and Crunchbase.