JPMorgan relies on Ethereum 2.0 and says that it can start a staking industry worth $ 40 billion
JPMorgan relies on Ethereum 2.0 and says that it can start a staking industry worth $ 40 billion
- analysts from JPMorgan said that the demand for staking mechanisms will explode after the complete transition to Ethereum 2.0.
- jpmorgan: Attractive crypto staking returns could bring direct competition to traditional bondvestment vehicles.
The Wall Street giant JPMorgan, once a glowing critic of Bitcoin and the crypto world in general, is now changing the melodies! Two JPMorgan analysts rely on the proof-of-stake (POS) developments by Ethereum 2.0.
In the latest report by the bank, the analysts wrote that Ethereum 2.0 can boost a 40-billion dollar staking industry in the next four years, i.e. until 2025. In addition, the two leading analysts found that the blockchain platforms with energy-efficient networks will continue to gain popularity.
Just like Bitcoin, the existing Etereum blockchain follows a proof-of-work (Pow) consensus model. However, ETH developers are now actively working on the next iteration-Ethereum 2.0-which will introduce the staking mechanism through its POS model.
According to JPMorgan analysts, the POS blockchain networks generate annual sales of $ 9 billion via their staking stocks. Since Ethereum will probably complete its transition from the existing Pow model to Ethereum 2.0 POS model, the analysts found that it can massively advance the introduction of the POS mechanism.
Therefore, JPmorgan expects the staking rewards to double to $ 20 billion. The analysts also found that the staking returns will double back to $ 40 billion by 2025.
in competition with traditional debt facilities
In the report, JPMorgan analysts added that blockchains with the staking mechanism will eat the market share of traditional bond offers. They compared the financial advantages of crypto staking with cash and other fixed-interest instruments such as US state bonds. The report Data from StakingRewards, the top-ten-staking cryptocurrencies offer between 3 and 13 percent annual returns.
The Ethereum competitor Cardano has the highest value value of over $ 30 billion. This is three times more than Ethereum 2.0, which has an application value of over $ 11 billion and is in second place. Interestingly, 75 percent of the Cardano (ADA) token are demolished, while it is only 4.96 percent of ETH.
This could possibly increase ETH use to implement the complete implementation of Ethereum 2.0. The report mentions the positive returns of the POS network together with the price increase of the POS tokens. It states:
Staking not only lowers the opportunities of the keeping of cryptocurrencies compared to other asset classes, but in many cases cryptocurrencies also pay a significant nominal and real return.
However,Investors should be aware that a consistently positive return through crypto staking largely depends on market volatility. So if the price of staking token decreases, the returns could drop at the same time. But with increasing market participation, volatility will subside. Thus, staking will be worthwhile in the long term.
The Ethereum 2.0 London Hardfork
This month in July, the Ethereum 2.0-Mainset will experience a major upgrade through the London Hard Fork. All eyes are currently directed to the EIP-1559 implementation, which will change the "basic fees" structure of the Ethereum network.
Supposedly it should make the Ethereum network deflationary and reduce transaction costs. A week ago, the developers successfully implemented the Ropsten test network while burning over 88k ETH coins. Ethereum-Miner spoke out against EIP-1669 implementation because it could reduce mining revenue.
Read more: It is finally here: The London upgrade from Ethereum starts, $ 174 million was burned in one day
Source: Crypto-news-flash.com
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