Top 20 Crypto Projects to Watch in 2025: Grayscale Report Centers on DeFi, AI

The crypto market is undergoing a sea change courtesy of AI and decentralized finance (DeFi), as per Grayscale Research’s latest report which highlights the top 20 crypto assets for the first quarter of 2025. The digital asset manager's updated list shows a significant shift in market dynamics, with DeFi protocols and AI-focused projects taking centre stage amid a dramatic market surge.

The cryptocurrency market witnessed unprecedented growth in Q4 2024, with total market capitalization surging 200% from $1 trillion to $3 trillion. "This remarkable expansion puts the digital asset market on par with traditional financial sectors," notes Sarah Chen, Chief Market Analyst at CryptoMetrics. "We're seeing institutional capital flowing into crypto at rates that eclipse the 2021 bull run."

Particularly noteworthy is the performance of the Smart Contract Platforms sector, where Solana's returns outpaced category leader Ethereum. Trading volume data from DeFiLlama shows Solana-based DEXs processed over $89 billion in transactions during Q4 2024, representing a 340% year-over-year increase.

DeFi tokens lead the list

Among the six new additions to Grayscale's top 20 list, DeFi protocols showed exceptional strength. Hyperliquid (HYPE) emerged as a standout performer, with its perpetual futures DEX recording $12.5 billion in monthly trading volume by December 2024.

"The success of Hyperliquid demonstrates the market's appetite for sophisticated DeFi instruments," explains Marcus Rodriguez, Head of Research at DeFi Pulse. "Their fully on-chain order book model has achieved a remarkable 98.7% uptime, setting new standards for decentralized derivatives trading."

Ethena's (ENA) innovative stablecoin, USDe, has rapidly gained adoption, reaching a market cap of $2.1 billion within six months of launch. The protocol's staked variant currently offers an impressive 18.2% APY, derived from spot-futures arbitrage strategies.

AI came second

The intersection of AI and blockchain technology has produced several breakthrough projects. Virtuals Protocol (VIRTUAL) on Base has deployed over 100,000 AI agents, collectively processing 2.5 million on-chain transactions in Q4 2024.

"We're witnessing the birth of autonomous blockchain agents," says Dr. Emily Zhang, Director of AI Research at Blockchain Institute. "VIRTUAL's agents have demonstrated 92% accuracy in complex decision-making tasks, approaching human-level performance in specific domains."

Grass (GRASS) has emerged as a key player in decentralized data infrastructure, with its network of 750,000 active users contributing bandwidth to AI training data collection. The protocol reported Q4 revenue of $75 million from data sales to major AI firms.

Solana ecosystem booming

The Solana ecosystem continues its exponential growth, with Jupiter (JUP) capturing 78% of all DEX aggregation volume on the network. Transaction data reveals Jupiter processed over $45 billion in trading volume during Q4, with AI-related tokens accounting for 35% of all trades.

Jito (JTO) has established itself as the dominant liquid staking protocol on Solana, with $550 million in fee revenue and $4.2 billion in total value locked (TVL). "Jito's success reflects the growing demand for liquid staking solutions," notes Alex Foster, Senior DeFi Analyst at TokenMetrics.

Institutional Adoption To Increase Further

Grayscale's institutional presence remains substantial, with the firm managing:

$6.62 billion worth of ETH
249,029 BTC valued at $23.33 billion
$46.23 million in various altcoins including LINK, LPT, AVAX, and BAT

"The expansion of Grayscale's crypto sectors index to 283 tokens signals growing institutional confidence in the broader digital asset market," says Michael Dover, Chief Investment Officer at Digital Asset Capital. "We're seeing sophisticated investors increasingly diversify beyond Bitcoin and Ethereum into DeFi and AI-focused protocols."