Chainalysis, a company active in the field of data analysis related to digital currencies, said that Ethereum could separate its price path from other digital currencies after the Merge update. The company’s experts say that Ethereum’s investment returns can be attractive to institutional investors and significantly expand the adoption of this digital currency among large companies.
To Report Cointelegraph’s ChinaAlysis wrote in its report yesterday that Ethereum’s upcoming upgrade could popularize ether staking, such as buying bonds and commodities, among large organizations, while making the network more environmentally friendly.
According to ChinaAlysis, Ethereum’s annual dividend is expected to be between 10% and 15%, making it an attractive alternative to bonds among institutional investors. It should be noted that the yield of US government bonds is significantly lower than that of Ethereum.
After Marj, Ethereum can separate its price path from other digital currencies; Because the ability to invest Ethereum and receive profit will turn this digital currency into a tool such as bonds and commercial goods, which can increase its value in addition to the profit of the investment.
According to ChinaAlysis data, the number of Ethereum investors who have allocated $1 million or more of Ether has increased from less than 200 in January 2021 to around 1,100 in August this year. Is.
If the rate of increase in the number of large Ethereum investors accelerates after the Marj update, then it will confirm the hypothesis that institutional investors are looking at Ethereum investment as a profitable strategy, ChinaAlysis says.
ChinaAlysis experts believe that the number of small and large ether traders will also increase as the discussion of Ethereum investments becomes more attractive.
Ethereums that are now staked are locked in a smart contract and cannot be withdrawn until the Shanghai update, which is likely to take place 6-12 months after Marj.
Liquidity in the Ethereum staking market is now a one-way flow (meaning no money is coming out of it at the moment), and this has led some staking services to offer synthetic assets that have the same value as staked Ethereum and can be bought and sold like regular tokens. . The problem with these synthetic assets, however, is that they don’t always maintain one-to-one parity with Ethereum.
The Shanghai update will allow investors to withdraw their holdings if they wish. This will start the flow of liquidity in the Ethereum market, and after that, investing in general will become a more attractive type of investment.
Also Read: 5 Common Mistakes About Ethereum Merge Update
Another point that ChinaAlysis experts have pointed out is that changing the mechanism of the Ethereum network from proof of work to proof of stake will reduce energy consumption in the network of this digital currency by 99% after the Marj event.
This analytical company has said in this regard:
The move to proof-of-stake will make Ethereum less environmentally damaging, and the move could make it easier for green investors to approach the asset. This is especially true for institutional investors.
ConsenSys, the developer of the famous Metamesh wallet and founded by Ethereum co-founder Joseph Lubin, also published a report this week titled “The Impact of Chaos on Institutions.”
Consensus experts also have the same feeling as ChinaAlysis regarding the impact of Ethereum staking rewards and the increasing compatibility of this blockchain with the environment in attracting institutional investors, but they have also emphasized the importance of Ethereum’s proof-of-stake chain in addition to the greater security it brings to institutional investors. brings, can also turn Ether into an anti-inflationary asset.
Consensys wrote in its report:
Slowing down the supply of new Ethereum and increasing the volume of tokens burned on the network will systematically reduce the circulating supply of Ethereum. This will put an anti-inflationary pressure on the price of ethereum, and as a result, institutional investors’ concerns about the devaluing of this token will be removed and the possibility of its price growth will increase.