The launch of the energy-efficient Ether 2.0 network will make proof-of-stake consensus mechanisms popular and make pledged returns a more attractive source of income for institutional and retail investors, according to a new JPMorgan report.
The two authors estimate that holders of pledged tokens on the PoS blockchain currently earn a total of about $9 billion per year from their pledged tokens.
The two analysts expect the revenue to more than double to $20 billion when Ether completes the transition from proof of work (PoW) to proof of stake (PoS) next year. They expect the blockchain industry’s pledge revenue to double again to $40 billion by 2025.
The two senior analysts also compared the financial incentives of pledged cryptocurrencies to cash, cash equivalents and fixed-income instruments such as U.S. Treasuries.
“The income earned through pledging can reduce the opportunity cost of holding cryptocurrencies relative to investments in other asset classes, and investments in asset classes such as U.S. dollars, U.S. Treasuries or money market funds can generate some positive nominal yields. In fact, in the current zero interest rate environment, we see yields as an incentive to invest.”
Among the top 10 cryptocurrencies by pledged market capitalization, pledged returns range from 3% to as much as 13% per year, according to StakingRewards.
The two analysts found the positive real return on PoS coins attractive in addition to any expected market price appreciation, writing.
“Not only does pledging reduce the opportunity cost of holding cryptocurrencies compared to other asset classes, but in many cases, cryptocurrencies pay high nominal and real rates of return.”
Proof-of-interest tokens aren’t the only cryptocurrency being taken seriously by JPMorgan Chase. The financial services giant is reportedly preparing to offer a bitcoin fund to select clients. It could launch as soon as this summer.
This new crypto product could be actively managed compared to similar passive bitcoin funds offered by Pantera Capital and Galaxy Digital.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/j-p-morgan-report-eth2-expected-to-launch-40-billion-pledge-industry-by-2025/
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