With the increasing pressure on zero-yield bank deposits, ether (ETH) yields are emerging as a more attractive option. According to a recent research report by Bernstein experts Gautam Chhugani and Manas Agrawal
the flight from bank deposits to the U.S. Treasury money markets has caught the attention of investors. But as ether yields gain popularity, it seems inevitable that demand for ETH deposits and yields will surge.
In terms of investment choices, money market yields at peak rates, denominated in U.S. dollars, are an investor’s first choice. However, ether holders may find themselves waiting up to a month to set up as network validators on Ethereum, potentially causing a shift in preferences. If there’s a decline in rates or USD debasement, ETH yields in ETH terms will become extremely attractive.
Ether yield, denominated in the cryptocurrency itself, continues to remain deflationary. This is an added advantage as Ethereum activity, directly linked to the yields, is experiencing increased adoption from both retail and institutional investors. The new crypto cycle will focus more on yield this time — unlike banks, which generate profits without sharing yields with savers, Ethereum fully shares its contributions with stakers and doesn’t dilute its monetary policy.
The recent Shanghai upgrade of Ethereum’s cryptocurrency has exceeded expectations in terms of ether staking trends. The amount of ether staked as a percentage of the total ETH has reached around 15%, an increase of 2% since the upgrade. Such impressive results have successfully mitigated any concerns about a supply overhang.
While traditional investments like U.S. Treasury money markets continue to hold their ground, the growing appeal of ether yields is hard to ignore. Crypto enthusiasts should keep a keen eye on developments in the Ethereum ecosystem. As it becomes increasingly mainstream, the demand for ether deposits and yields can be expected to rise and possibly reshape the crypto landscape.
In conclusion, the tension between traditional investments and emerging crypto yield opportunities like ETH cannot be understated. Investors seeking attractive returns and innovative investment choices will find themselves at a crossroads, weighing the benefits and drawbacks of each option. Crypto enthusiasts need to stay informed and anticipate the fast-evolving nature of the blockchain future, technology, markets, and safety, as the future of digital assets and new investment opportunities beckon.
Source: Coindesk
