Institutional Investors Turn to Ethereum for Yield as Staking Gives Edge Over Bitcoin

The investment bank Standard Chartered has highlighted a potential shift in the digital asset market, forecasting that Ethereum's monthly net asset value (mNAV) is poised to outperform Bitcoin in the near term. This projection is attributed to the growing income generated from Ethereum staking, a feature not available to Bitcoin investors. The bank's analysis indicates that Ethereum's staking yield, currently around 4-6% annually, is contributing significantly to its mNAV, offering a compelling case for institutional investors seeking yield in the crypto space.

The firm’s analysts noted that Ethereum's transition to a proof-of-stake model in 2022 has not only improved its energy efficiency but also introduced a regular income stream for holders through staking rewards. This structural change contrasts with Bitcoin's deflationary model, which relies solely on price appreciation for returns. The staking income is being integrated into Ethereum's mNAV calculations, a metric that Standard Chartered uses to assess the performance of digital assets in a managed portfolio context.

Standard Chartered emphasized that the inclusion of staking income in Ethereum's valuation model is a key differentiator from Bitcoin, which does not offer yield generation through protocol mechanisms. This distinction is increasingly relevant as investors seek diversified returns in a low-yield environment. The bank's report further pointed out that Ethereum's mNAV has seen consistent growth since the merge, outperforming Bitcoin in several institutional investment benchmarks.

The firm also acknowledged the risks associated with the broader crypto market, including regulatory uncertainties and volatility. However, it remains confident in Ethereum's long-term fundamentals, citing ongoing upgrades to the network and its growing adoption in decentralized finance (DeFi) applications. According to the analysis, Ethereum’s mNAV is expected to see a 15-20% increase in the next 12 months, assuming stable regulatory conditions and continued staking yields.

Standard Chartered's findings have been welcomed by some in the institutional investment community as a sign of growing institutional recognition of Ethereum’s value proposition. The report adds to a growing body of analysis suggesting that digital assets are evolving from speculative assets to more mature, yield-generating investments. While the market remains dynamic, the inclusion of staking income in mNAV calculations represents a significant shift in how institutional investors are evaluating crypto assets.