Despite robust growth in both markets, the average return for crypto staking is currently 450% more than the average dividend given to investors in the S&P 500.
According to Google Finance, the S&P 500, which measures the 500 largest public corporations in the United States, had its highest first-quarter growth performance in 5 years on March 31 at 10.16%.
But with an average dividend yield rate of 1.35%, it was the lowest since Q4 2021, some 2.5 years ago. Interestingly, this is 0.23% less than the record low of 1.12% from the first quarter of 2000, which occurred 24 years ago.
According to the benchmark reward rate on Staking rewards, crypto staking, which entails locking up one's cryptocurrency assets to earn interest or rewards, presently yields an average yearly return of 6.08%.
The average dividend payment among all the constituent companies in the index is known as the S&P 500 dividend yield. Microsoft had the highest dividend yield of the three biggest S&P 500 firms, at 0.71%, followed by Apple at 0.56% and Nvidia Corp at 0.02%.
Of the top 100 cryptocurrencies, Algorand (ALGO) pays the highest staking reward rate of 84.19%, followed by Cosmos (ATOM) at 17.17% and Filecoin (FIL) at 16.34%. However, high-yield staking is risky since assets are frequently locked up, leaving investors unable to exit even if the underlying value falls.
Institutional investors are becoming aware of the significant gap between cryptocurrency staking rewards and dividend yields. On March 30, Cointelegraph revealed that Grayscale Investments had formed an investment fund for sophisticated customers to expose their portfolios to revenue earned by staking cryptocurrency tokens. Grayscale specified three PoS tokens that will be kept in the fund: Osmosis (OSMO) has a 24% share, Solana (SOL) has 20%, and Polkadot (DOT) has 14%, with the remaining 43% designated as various tokens.
Grayscale is also one of a few asset management firms, including Ark Invest and Fidelity Investments, that are seeking US SEC clearance to stake ETH as part of its Ethereum ETF fund, which is expected to be authorized this year.
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