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TLDR:
- Avalanche joins the Grayscale list after surging user activity and stablecoin flows on its network.
- Morpho ranks second in DeFi lending by TVL, backed by strong revenue and V2 launch.
- Lido removed amid regulatory concerns weakening demand for decentralized staking.
- Optimism dropped due to shrinking reserves and uncertain short-term value prospects.
Grayscale has updated its Top 20 Altcoins list for Q3 2025, making two notable changes that reflect shifts in market activity and protocol performance.
Avalanche (AVAX) and Morpho (MORPHO) have been added to the lineup, replacing Lido DAO (LDO) and Optimism (OP). The revised list focuses on assets Grayscale views as having high growth potential over the next quarter.
The update follows an internal review of sector fundamentals, adoption trends, and technical performance. All listed assets continue to carry high volatility and risk.
Grayscale Adds Avalanche and Morpho
According to Grayscale, Avalanche earned its spot due to increased adoption and user activity in its ecosystem.
They pointed to a recent surge in transaction volume, partially linked to 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. Although 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.
Lido and Optimism Removed on Weaker Near-Term Outlook
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.
Following the announcement, all four tokens, AVAX, MORPHO, LDO, and OP, experienced price dips, according to WiseCrypto on X. This reaction reflects the broader volatility across the crypto sector, especially during index reshuffles.
🚨 Grayscale just updated its Q3 2025 “Top 20 Altcoins” list:
👋 Removed: Lido DAO – $LDO, Optimism – $OP
✅ Added: Avalanche – $AVAX, Morpho – $MORPHO
Key reasons:
• $AVAX surge in partnerships
• $OP’ s ETH reserves dropped 54%
• $MORPHO launching V2 targeting TradFi
•… pic.twitter.com/pVQeLpy3Xk
— Wise Crypto (@WiseCrypto_) June 27, 2025
Grayscale emphasized that investment decisions should consider not just fundamentals but also timing, macroeconomic conditions, and regulatory changes.
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