Grayscale Reveals Why Altcoins Could Be a Goldmine Despite 59% Drop!

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Altcoins Are Down 59% From Their Highs: Grayscale Says That Is the Point

Key Takeaways

  • Grayscale published is arguing altcoins offer a “potentially compelling entry point”.
  • Altcoin index down approximately 59% from 2025 highs and up only 2% from cycle lows.
  • The research note and the TAO filing arrived on the same day, neither is coincidental.

What the Chart Shows

Grayscale created an index tracking the prices of altcoins, using data from FTSE Russell. Starting at a value of 100 on January 1, 2023, the index’s performance can be broken down into three distinct phases.

  1. Altcoins ground sideways between 100 and 150 through 2023, building a base that went largely unnoticed.
  2. 2. The index surged from 150 to a peak of approximately 390 in mid-2025, a 160% rally driven by Bitcoin ETF approval momentum, institutional inflows, and the broader risk-on environment that characterized the 2024-2025 cycle.
  3. The index has declined from 390 to approximately 165 as of March 31, 2026, a 59% drawdown that has erased most of the cycle’s gains and brought prices back toward the 150 level that marked the start of the bull run.

As an analyst, I’ve been closely watching that 150 level – you can see it marked as the orange dotted line on the chart. Grayscale’s research highlights it as a key support area. Currently, altcoins are about 2% above their lowest points in the cycle and are moving towards this baseline, which is where we saw the beginning of the 2024-2025 rally. Grayscale believes this level is a critical floor to monitor, and it’s the same one they used when outlining their analysis in their April 2nd report.

What Grayscale Said

On April 2nd, Zach Pandl, Research Head at Grayscale, suggested that now might be a good time to consider investing in altcoins, as their prices are currently very low compared to historical levels. He points out that while the stock market (S&P 500) fell 5% in March due to global uncertainty, Grayscale’s index of crypto sectors actually increased by about 4%. Pandl believes this difference suggests that altcoins may be undervalued, despite the overall market conditions. Since the launch of crypto ETFs in January 2024, the altcoin group he follows has fallen 59% from its peak, but is only 2% above its lowest point in the past three years – a price range he sees as a potentially good opportunity for investors.

The report uses cautious language. While Pandl admits they can’t say for sure if cryptocurrency prices have hit their lowest point, they note that recent price movements are positive. This careful wording is important – it distinguishes the report from promotional material and lends credibility to the data, even considering its source.

What Grayscale Did

The research note and SEC filing, when considered together, present a clearer argument than either document does on its own.

On April 2nd, Grayscale submitted an updated filing with the Securities and Exchange Commission (SEC) to register its Grayscale Bittensor Trust. This trust would allow U.S. investors to legally and safely invest in TAO, the digital currency used by the Bittensor AI network. The filing, number 333-292418, was prepared with legal assistance from Davis Polk & Wardwell and is a significant move towards offering a TAO investment product in the U.S. with SEC supervision.

🚨 UPDATE: Grayscale files S-1 amendment for its Bittensor ($TAO) trust.

— Cointelegraph (@Cointelegraph)

Grayscale only updates its S-1 filing for products it actually plans to launch. A recent analysis suggests that altcoin prices are attractive, and the S-1 filing proves this isn’t just speculation – it demonstrates a real commitment from Grayscale backed by regulatory steps. Essentially, when a firm claims an asset is undervalued *and* actively works to offer it to investors, those actions speak louder than words and reinforce their research.

What the Data Concludes and What Could Still Go Wrong

Based on information from Pandl’s note, FTSE Russell index data, and the TAO filing, it’s clear that Grayscale thinks altcoin prices are now attractive to institutional investors. They’re demonstrating this belief by both publishing research and submitting regulatory filings, effectively acting on it in two ways at once.

Evidence supports this perspective, and it’s based on reliable, independently verified data. For example, the 59% drop from recent highs is confirmed by both FTSE Russell and Artemis, not just Grayscale. Public records also show the S&P 500 performed poorly in March. Currently, the altcoin index is 2% above its lowest point in the recent cycle – historically, this level has signaled a recovery, not further losses. In fact, the index hit this 150 level twice last year, and each time it was followed by a price increase.

While there’s a valid argument for a potential bottom, it’s important to consider the current unfavorable conditions. Previously, the altcoin index neared 150 during a relatively stable period – no major wars, oil prices under $80, and growing institutional confidence. Now, we’re facing the opposite: an active conflict in the Middle East, oil exceeding $100, extreme fear in the market (as indicated by a consistently low Fear and Greed Index), and ongoing uncertainty in the broader economic picture. Historically, these conditions have led to even lower valuations. A 59% drop from peak levels isn’t necessarily a bottom given these factors; it simply represents a point where the market could either bounce back or fall further, depending on unpredictable circumstances that charts can’t predict.

Grayscale benefits financially if people see altcoins as good investments, and while this doesn’t discredit their research, it’s important to be aware of their potential bias. The research itself and the data supporting it are genuine. However, whether the predicted price low will actually hold depends on broader economic conditions, and neither the research report nor the regulatory filing can predict those conditions.

This article is just for educational purposes and shouldn’t be taken as financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. Before you make any investment choices, be sure to do your own research and talk to a qualified financial advisor.

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2026-04-03 18:53