The emergence of Ethereum (ETH) as a formidable digital asset has caught the attention of financial experts, including Raoul Pal, CEO of Real Vision. Pal, a notorious Ethereum bull, believes the platform’s latest updates could pave the way for a substantial increase in value.
Also Read: Raoul Pal Reveals the Future of the Global Economy – Coinpedia Fintech News
Ethereum’s stake return: a hidden gem
During an insightful conversation with Jeff Doman, Chief Investment Officer of Digital Asset Hedge Fund, Pal stressed the importance of Ethereum’s staking yield, a utility often overlooked by many investors. After the Ethereum merger, the platform now offers a return on Ethereum stake, giving holders the chance to earn a percentage of their holdings over time.
Also Read: Breaking: Ethereum’s Exchange Deposit Transactions Hit a 6-Year Low! Will ETH price now aim for $2K? – Coinpedia Fintech News
This unique feature essentially creates a money market curve for the cryptocurrency, providing a compelling incentive for individuals to hold their Ethereum and earn a return. Currently, the stake return on Ethereum ranges between four and 7%, making it an attractive proposition for investors.
ETH appreciation soon?
The combination of the staking mechanism with Ethereum’s shrinking supply, thanks to the burn mechanism and reduced supply issuance, paves the way for a potential rise in Ethereum’s value. Pal’s optimistic outlook is based on four main reasons for holding ETH: as collateral for trading futures or options, for decentralized finance (DeFi) applications, as a wallet for gas, and as a passive investment. With the introduction of staking, passive holders of ETH can now earn returns on their investment.
Ethereum’s Stake Rate: A Potential Game Changer
Pal compares Ethereum’s staking return to the passive return of earning nothing versus earning something. Based on this analogy, he believes that Ethereum’s stake rate could rise significantly in the coming years, effectively making it the risk-free rate in the crypto market.
Ethereum: future perspective
In their conversation, Pal and Doman also discussed Ethereum’s potential future as a financial market. They highlighted opportunities for rate arbitrage, maturity mismatches and structured products.
With the rapid growth of DeFi, stablecoins, and NFTs in recent years, they expect these financial instruments to become a staple offering within the digital asset industry in the coming years.
