According to a recent JPMorgan research, the launch of the energy-efficient Ethereum 2.0 network will publicize the proof-of-stake consensus mechanism. This makes staking yields a more appealing source of revenue for both institutional and retail investors.
According to the authors, holders of staked coins on PoS blockchains are potentially generating $9 billion per year on their staked holdings.
Prediction of the Analysts
Analysts predict that when Ethereum switches from proof-of-work (PoW) to proof-of-stake (PoS) next year, revenues will more than double to $20 billion. By 2025, they expect staking yields in the blockchain industry to have doubled to $40 billion.
Their Statement
The two senior analysts evaluated the financial incentives offered by staked cryptocurrencies to cash, currency equivalents, and fixed income assets like US Treasury bonds:
“Yield earned through staking can mitigate the opportunity cost of owning cryptocurrencies versus other investments in other asset classes such as US dollars, US Treasuries, or money market funds in which investments generate some positive nominal yield. In fact, in the current zero rate environment, we see the yields as an incentive to invest.”
The Yield of PoS
As per StakingRewards, yearly staking incentives for the top 10 cryptocurrencies by staked capitalization range from 3% to 13%. Although these are nominal yields, the underlying currency’s market exchange rate also influences their real ROIs.
The actual positive yields of PoS coins and any anticipated market price gain appeal to JPMorgan analysts. According to Forbes, staking not only lowers the opportunity cost of owning cryptocurrencies vs other asset classes, but it also pays a significant nominal and real yield in many cases.
JPMorgan And Their Crypto Plan
Proof-of-stake coins aren’t the only cryptocurrencies getting severe treatment from JPMorgan. The financial services giant is reportedly preparing to offer select clients a Bitcoin fund. It could launch as soon as this summer.
This new crypto product may also be actively managed. This is in contrast to similar passive Bitcoin funds offered by Pantera Capital and Galaxy Digital.
