Crypto asset manager Grayscale has published a detailed report showing sectors poised for a bullish rally in the last quarter of the year amid a noticeable recovery in the cryptocurrency market, especially with major players such as Bitcoin (BTC) and various altcoins reaching price levels not seen in over two months .

Grayscale highlights key cryptocurrency trends

On your Thursday reportGrayscale has updated its cryptocurrency sector indexes, showcasing recent themes in the digital asset industry. Key trends include the rise of decentralized artificial intelligence (AI) platforms, efforts to tokenize time-honored assets, and growing popularity memecoins.

Notably, Bitcoin and the cryptocurrency sector outperformed other market segments in 2024, likely due to the successful launch of Bitcoin spot. products traded on the stock exchange (ETP) in the US earlier this year and favorable macroeconomic conditions after the Federal Reserve (Fed) cut interest rates on September 18.

Gaining 13% this year, Ethereum underperformed Bitcoin but still outperformed many other cryptocurrencies. Grayscale’s Crypto Sectors Market Index (CSMI) has seen a slight decline of about 1% year-to-date, while the Smart Contract Platforms Crypto Sector Index has fallen about 11%, down Ethereum performance relatively stronger than its peers.

Despite the challenges, the asset manager states that Ethereum remains the leader in the sharp contract platform sector, boasting the highest number of applications, developers and fee revenues.

Top 20 cryptocurrencies for the upcoming quarter

When creating its quarterly list of the top 20 cryptocurrencies, Grayscale carefully analyzes hundreds of digital assets. This list presents a diverse selection of high-potential assets for the coming quarter.

The company’s honorees include prominent performers such as Sui (SUI), Bittensor (TAO), Optimism (OP), Helium (HNT), Celo (CELO), and UMA Protocol (UMA). However, below is a full list of other resources that Grayscale pays special attention to.

Sui, a third-generation blockchain created by former Meta engineers, has gained popularity following a recent event network update which increased transaction speed by 80%, exceeding Solana’s capabilities.

Optimism, an Ethereum Layer 2 solution, plays a key role in scaling the Ethereum network. He developed a framework called “Superchain” which is used by platforms such as Coinbase’s Layer 2 BASE.

Celo and UMA benefit from unique trends, with Celo focusing on the employ of stablecoins and payment solutions in developing regions, particularly in Africa. The platform recently surpassed Tron in terms of stablecoin usage, while UMA serves as an Oracle network decentralized applications like Polymarket.

Helium’s placement in the top 20 reflects Grayscale’s preference for category leaders that offer sustainable revenue models. The project has established itself as a leader in decentralized physical infrastructure networks (DePIN), expanding its network to over one million hotspots and generating significant fee revenues.

Ask for sorwhich focuses on the intersection of artificial intelligence and cryptocurrencies, has recently gained recognition within Grayscale for improvements to its market structure, offering a decentralized platform for AI innovation.

As part of this quarter’s adjustments, Grayscale replaced several assets, including Render, Mantle, ThorChain, Pendle, Illuvium, and Raydium. While Grayscale sees value in these projects, the revised top 20 list is intended to offer investors more compelling risk-adjusted returns in the coming months.

As of this writing, the biggest winner across all time frames on Grayscale’s top 20 list is Bittensor’s TAO token, which is up 86% in fourteen days and a significant 841% year-to-date, bringing its current trading price to $536.

Featured image from DALL-E, chart from TradingView.com