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Treasury Yield Surge Rattles Ethereum’s Staking Appeal

Treasury Yield Surge Rattles Ethereum’s Staking Appeal

The recent surge in the 10-year US Treasury Yield, reaching levels not seen since 2007, has significantly impacted both equities and cryptocurrencies, with Ethereum feeling a more pronounced effect than Bitcoin.

Ethereum, a leading cryptocurrency, allows investors to earn staking rewards by locking up their ETH holdings on the Ethereum network.

However, these staking rewards have dropped to an annualized rate of 3.5%, approaching their lowest point in the last 10 months and well below their recent peak of over 8%. This return is now less attractive than the 5% yields offered by US government bonds, highlighting the waning appeal of the cryptocurrency market due to rising traditional interest rates.

In terms of performance, Ethereum’s year-to-date increase of 32% lags behind Bitcoin’s impressive 77% rally.

In the past month, during a period marked by a roughly 50 basis point increase in the US 10-year Treasury yield, Ethereum has seen a decline of over 5%, while Bitcoin has gained 8%.

The attractiveness of ETH staking has diminished as more investors turned to it following Ethereum network upgrades. Platforms like Lido and Rocket Pool have become dominant in the decentralized finance sector of the cryptocurrency industry.

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Staking quantity plummeted by 67% to 1.2 million in September compared to May, according to data from 21Shares AG.

While Ethereum’s price has risen by 2% amid a broader crypto market upturn, it still faces a crucial resistance level at $1,600. However, with over 100 million active Ethereum addresses, there may be potential for a turnaround ahead.

This data underscores how the cryptocurrency market is evolving in response to shifts in traditional financial assets and interest rates.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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