VanEck "Institutional ETH Staking Expansion... Passive Holders Could Be Disadvantaged"

Minseung Kang

Summary

VanEck said the expansion of Ethereum (ETH) staking by institutional investors could be unfavorable to investors who simply hold.
It forecast that Ethereum's Fusaka upgrade will improve transaction efficiency and Layer2 expansion, and that institutional participation will become more active as a result.
It analyzed that investors who do not stake could be exposed to the relative asset value dilution risk.

Global asset manager VanEck said that as institutional investors increase their purchases of Ethereum (ETH), ordinary holders who do not stake (deposit) may increasingly be at a disadvantage.

According to cryptoasset (cryptocurrency) specialist media BlockBeats on the 4th, VanEck said in a recent report, "Ethereum will increase transaction efficiency through the 'Fusaka' upgrade in December and make Layer2 expansion easier," and "this will further encourage institutional participation," it forecasted.

It added, "Institutions are steadily buying ETH through exchange-traded funds (ETFs) or digital asset management funds, and staking it to earn rewards," and analyzed, "Meanwhile, investors who simply hold without staking can be exposed to the risk of relative asset value 'dilution' over time."

Meanwhile, the Fusaka upgrade is designed to increase network efficiency by reducing the data burden validators must process. VanEck added, "If transaction costs fall and the user experience improves, ETH's utility will increase, but mainnet fee revenue may decrease," and "ultimately, Ethereum could increasingly take on the character of an asset that is 'deposited to earn returns.'"

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