Ethereum Loses Appeal as Staking Yields Drop

A recent report by 10X Research suggests that Ethereum’s appeal is declining due to falling staking yields and competition from other investment options offering higher returns. As yields on Ethereum’s network decrease, with platforms like Lido now showing lower Annual Percentage Rates (APR), investors are drawn to alternatives in both DeFi and traditional finance, where yields are currently more attractive. This shift is reducing the incentive for holding and staking ETH, weakening its overall demand.

The slowdown in blockchain activity has also impacted Ethereum’s burn rate, causing its circulating supply to increase and placing additional downward pressure on its price. As a result, some Ethereum holders view staking as a modest income source rather than an engine for wider ecosystem engagement, a view reinforced by the rise of competing low-cost assets like meme tokens on other chains, particularly Solana.

According to 10X Research, Ethereum faces a bearish market trend, with technical indicators like the MACD (Moving Average Convergence Divergence) pointing to slowed demand and continued selling pressure. The MACD line, which reflects price momentum, is trending below the signal line, signaling a bearish outlook for the asset. This means Ethereum’s price may face further declines if support levels are not maintained.

The report warns that if traditional finance interest rates continue to exceed ETH staking yields, Ethereum’s value could face sustained pressure. While a surge in market momentum could improve ETH’s price outlook, without increased demand and higher yields, Ethereum may struggle to regain its former highs. For now, Ethereum’s competition with high-yield traditional assets and the availability of appealing alternatives within the crypto space continue to shape its challenging market position.