Grayscale Says Tokens Including Hyperliquid, Ethena and Virtuals Will Have Great Q1

Grayscale predicts tokens includig newcomers Hyperliquid, Ethena and Virtuals Protocol have the potential to outperform in the first quarter of 2025, according to a report published Dec. 30.

Recently launched Hyperliquid, Ethena, Virtuals Protocol, Jupiter, Jito, and Grass and more established names like Bitcoin, Ethereum, Solana, Chainlink, and SUI are likely to have a great Q1, Grayscale said.

For Q1 2025, Grayscale researchers prioritized tokens related to three primary market themes/narratives: the U.S. elections and potential industry regulations, breakthroughs in decentralized AI and AI agent blockchain use cases, and growth of the Solana ecosystem.

“In addition to the new themes mentioned above, we continue to be excited about themes from previous quarters such as Ethereum scaling solutions, tokenization, and decentralized physical infrastructure (DePIN). Each of these themes is represented by the inclusion of protocols that return to the top 20, such as Optimism, Chainlink, and Helium, respectively,” Grayscale researchers wrote.

High Potential

Grayscale researchers analyze hundreds of tokens every quarter to find the 20 with the highest potential. Many factors influence the decision-making process, including network growth, upcoming catalysts, the sustainability of fundamentals, token valuation and supply inflation, and potential tail risks.

Hyperliquid is a Layer 1 for on-chain financial applications, while Ethena is a stablecoin provider. Virtuals Protocol is an AI Agents launchpad on Base, Jupiter is a Solana-based decentralized exchange (DEX) aggregator, Jito is a Solana liquid-staking protocol, and Grass is a decentralized data network.

The report also features a segment on smart contract platforms. Category leader Ethereum had a remarkable year, with various wins, such as exchange-traded funds (ETF) approvals and the Dencun network upgrade, which increased speed and throughput. However, its ETH token underperformed, particularly against Solana’s SOL.