Despite strong growth in both markets, the average reward for crypto staking is currently 450% higher than the average dividend paid to an S&P 500 investor.
On March 31, the S&P 500, an index that tracks the 500 largest publicly traded companies in the United States, posted its highest first-quarter growth rate in five years at 10.16%, according to data from Google Finance.
However, the average dividend yield of 1.35% is the lowest since Q4 2021, about two and a half years ago. Notably, this is a 0.23% difference from the all-time low of 1.12% set 24 years ago. First quarter of 2000.
Meanwhile, according to Staking Rewards' benchmark reward rate, crypto staking (the act of locking up your crypto holdings and earning interest and rewards) currently pays an average annual return of 6.08%.
The S&P 500 dividend yield is the average dividend of all individual stocks in the index. Among the top three S&P 500 companies, Microsoft had the highest dividend yield of 0.71%, followed by Apple at 0.56% and Nvidia Corp. at 0.02%.
Among the top 100 cryptocurrencies, Algorand (ALGO) currently pays the highest staking reward rate at 84.19%. This is followed by Cosmos (ATOM) with 17.17% and Filecoin (FIL) with 16.34%.
However, high-yield staking comes with risks as assets are often locked up. This means that investors may not be able to liquidate even if the value of the underlying asset declines.
Related: Restaking may pose a “hidden risk” to Ethereum — Coinbase
Institutional investors are starting to take note of the significant differences in crypto staking rewards and dividend yields.
On March 30, Cointelegraph reported that Grayscale Investments has launched a tailored investment fund for sophisticated clients, aiming to provide portfolios with returns from staking crypto tokens. .
Grayscale listed three PoS tokens held in the fund. Osmosis (OSMO) has a share of 24%, Solana (SOL) 20%, Polkadot (DOT) 14%, and 43% falls under other tokens.
Grayscale is also one of a handful of asset management firms, including Ark Investments and Fidelity Investments, to seek approval from the US SEC to invest in ETH as part of an Ethereum ETF fund, if approved this year. .
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