Ethereum will attract more institutional investors after switching to PoS as the network will offer more attractive yields, analytics firm Chainalysis said.
According to a report by Chainalysis, ether (ETH) staking will offer investors up to 10-15% returns per year, making it an attractive alternative to bonds for institutional investors, as the returns on bonds themselves are significantly lower. Thus, after the merger, Ethereum will become like bonds or commodities with a market risk premium.
Experts note that the number of participants who have placed $ 1 million or more in ETH is growing – from less than 200 people in January 2021 to about 1,100 in August this year. Chainalysis’s assumption of more widespread ETH adoption among institutional investors will be confirmed if this number increases faster after the merger.
In general, according to analysts, the upcoming update will make Ethereum a much more convenient investment tool, which should also attract more retail and institutional traders. Among other things, the transition to Proof-of-Stake (PoS) will make Ethereum greener, which will attract investors who have certain requirements for sustainable development.
Earlier, Bits.media published a large-scale material on how large companies and cryptocurrency service providers are preparing for the upcoming merger, as well as how ordinary users can prepare for it.
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