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Commodity strategists at Bloomberg say the two altcoins are outperforming Ethereum (ETH) when looking at certain metrics.
In the latest Bloomberg Intelligence: Crypto Outlook report, analysts Mike McGlone and Jamie Douglas Coutts say that Ethereum strongly dominates much of the market in terms of fee structure and issuance system.
But analysts Say There are two blockchains that outperform Ethereum as far as staking yields are concerned. These altcoins include the interoperable blockchains Polkadot (DOT) and Cosmos (ATOM). It’s an ecosystem of blockchains designed to scale and communicate with each other.
“As a result of Ethereum’s dominant market share in fee income and sound currency (issuance) policies, the deployment of capital in the crypto economy may initiate pricing risks to Ethereum’s real/adjusted rate (yield) . Bloomberg’s list of layer 1 crypto assets has only two networks with real yields trading at a positive spread to Ethereum’s benchmark rate of 5.03%. Polkadot trades at a 0.77% premium and Cosmos at a 0.10% premium. Assets trading at negative spreads can fall victim to mispricing. Inflation/issuance of these assets may need to undergo a radical cut similar to Ethereum to attract more capital.
Bloomberg analysts say staking adds a new dimension to investing in cryptocurrencies, comparing it to investing in corporate bonds.
The emergence of crypto as an asset class combined with a yield component presents investors with a new set of considerations when evaluating risk/reward opportunities in this space. Given their volatility and novelty, staked assets can be equated to junk bonds Proof-of-stake yields are similar to corporate bonds in that they are linked to fees/cash flow .
network/company.
Analysts say a rise in staking yields is potentially expected in the first half of 2023, when they speculate central bank liquidity may improve.
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