What Happened: Two senior analysts at JPMorgan Chase estimate that the launch of Ethereum ETH/USD 2.0 could create a staking industry worth $40 billion by 2025.
According to a report seen by Forbes, the Ethereum blockchain’s transition to a more energy-efficient Proof-of-Stake (PoS) consensus mechanism could lead to the rise in popularity of a new way to make money called staking.
Why It Matters: The staking industry today generates $9 billion in revenue annually, according to the analysts’ estimates.
This could become 20 billion in the quarters following the launch of Ethereum 2.0 and double to $40 billion by 2025, the analysts believe.
“Not only does staking lower the opportunity cost of holding cryptocurrencies versus other asset classes, but in many cases, cryptocurrencies pay a significant nominal and real yield,” said the analysts.
Even crypto exchanges like Coinbase Global Inc COIN could benefit from Ethereum 2.0, taking its current staking revenue, which is around $10.4 million to $200 million by 2022.
"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," read the report.
The top 10 cryptocurrencies by market cap have annual staking rewards ranging from 3 to 13%, according to data from StakingRewards.
Price Action: At press time Ethereum was trading at $2,060, down 3.18% in the past 24-hours. The leading digital asset, Bitcoin BTC/USD was trading at $33,276, down 0.61% overnight.
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