Typically I am a full-on bitcoin bull. I almost always strive to invest into the coins that I have extremely strong conviction in; rather than chasing the quick profits with low-cap coins. I invest in coins that I believe will still be around and used ten years later, or much longer. Naturally I believe that bitcoin has those characteristics. But, I am not afraid to keep an open mind about other coins as well, and admit when they have the potential to do something special, or present some great opportunity.
Ethereum has often been one of those rare other coins that I will also invest into. While, I know it is no secret the potential that ethereum has. It is the number two ranked cryptocurrency in-terms of market cap after all. There has been endless hype in the past about ICO's, Staking, DeFi and also NFT's.
But I'm here to tell you that you haven't seen anything yet.
Everything that I am talking about is more so in regards to ethereum as an investment opportunity, a way to grow your net worth, strive towards financial freedom and also have a great passive income. All of these things are great passions of mine.
But please remember, that everything in this article is mere speculation, and may not come to be. So as always, please do your own research.
While ETH 2.0 has famously seen delay after delay; late last year phase 0 did launch and it included one of ETH 2.0's most hyped features. The ability to stake your ETH for a passive income.
Many people probably already earn a passive income from lending out their ethereum to places like BlockFi or Celsius. But in those situations, always remember that you are giving up the custody of your coins to those services. There is a high risk that you could lose everything. On the other hand. ETH 2.0's staking has the coins in a smart contract on the ETH blockchain. While you do have to lock them up for a certain duration of time; you do still retain custody of your coins. This is considered a much safer option than lending out your coins to a third party company.
Up until this point the interest rate has been great so far as well. Ranging from 7% to upwards of 12%. The only downside has been that if you do decide to stake your ETH into the ETH 2.0 protocol; you would have to then lock up your ETH until ETH 1.0 and 2.0 fully merge. The issue is that no one knows exactly when this will happen. It could happen three months from now. It could be 1 year from now. It could be 2 years from now. No-one knows for certain.
I recently saw an Ethereum 2.0 developer make a Twitter post about what he thinks could possibly be the initial interest rate for ETH after 2.0 has fully launched, and the changed have merged. The rates he was saying were quite high and interesting to say the least.
If his prediction does come true and results in an initial 25%+ staking interest rate for ethereum; this would change everything. First you need to take into account the ETH EIP 1559 protocol that will soon be introduced. This will result in ETH being burned in every transaction and could actually make ethereum a deflationary coin. That alone will probably be enough to pump the price of ethereum up further.
But if there is anywhere near a 25% interest rate for staking, everyone will come and put there money into ethereum. There are other coins that have staking rates higher than that, but I wouldn't ever put any of my confidence into those coins. This is ethereum that we are talking about here, one of the two blue chips of cryptocurrency. This could be the next great way to make a great passive income. For all of those people who were fortunate enough to accumulate 32 eth; just staking alone could be enough to grant you financial freedom in the future.
But look at the chart that he made. He listed that a 25% rate was his best guess of what could happen, but the rate could be even higher than that. Of course this is just speculation, but if it would come true, it's enough to make you want to throw a lot more money into ethereum. The developer is claiming that this interest will come from the ETH staking issuance reward, but also from transaction tips that would have normally been given to miners in the past. But since there will no longer be any mining on ETH in the future, it would then go to the stakes.
While in my opinion, if that kind of rate does exist for ethereum; I don't think it would last very long. That incredible rate would attract everyone to stake a large amount of ETH which would probably drop that rate further. But like I said, it is very fun to think about. While bitcoin does remain my largest focus and probably always will be. This does make me excited to think about the possibilities of what might happen with ETH 2.0, and I am actively trying to accumulate as much ethereum as possible.
I think that during this bull cycle, with the implementation of EIP 1559 alone, we could see ETH go over $10,000 very easily. But if you're able to receive that kind of insane interest rate, $20,000 would be a very conservative prediction for ETH to hit.
So what do you think? Do you think this kind of staking rate would be possible on ETH 2.0? Have you reached your Ethereum accumulation goals? And what is your price prediction!
As always, thank you for reading!
The immediate future of all ETH 2 related development has a foggy timeline. A lot is uncertain as of now. The 25% interest will surely jump start the eth craze and 10000 dollar is easily doable, but I think 25% is still a speculation now. Though a 12.5 % will also be a great booster for eth. People will withdraw from nexo, celsius and blockfi in mass scale then.