According to FalconX estimates, by mid-2025, the Fed’s key interest rate will fall below Ethereum staking yields, which will contribute to the rise in value of the second-largest cryptocurrency by market capitalization. This shift could increase investor interest in staking as a more profitable alternative to traditional financial instruments offering low interest rates.
Since 2023, the spread between these two indicators has remained negative, creating favorable conditions for the growth of crypto assets. At the end of 2022, following the collapse of FTX, the situation was the opposite, leading to short-term market instability.
Futures traders expect the Fed’s key interest rate to decrease to 3.5% by June 2025 with a 90% probability. This could open up additional opportunities for investors seeking higher yields. On September 18, the Federal Reserve already lowered the rate by 50 basis points to 4.75-5%, confirming the trend toward monetary policy easing. Currently, Ethereum staking rewards stand at 3.19%, making it competitive compared to traditional assets.
FalconX’s report emphasizes: “It remains to be seen how staking will compare to the risk-free rate during a full Ethereum bull run.” A bull run could significantly boost interest in the cryptocurrency, increasing both its price and overall network activity.
Recently, on-chain activity has surged, leading to average transaction fees in the Ethereum network reaching a two-month high, which has increased staking yields. This indicates a gradual recovery of interest in the network’s usage and strengthens the positive outlook for the future of the crypto asset.
However, transaction fees currently account for only 10-20% of the levels seen during the previous two bull markets, suggesting that the potential for further price growth and network activity has not yet been fully realized.
FalconX experts note: “The improvement in staking yield dynamics could become a powerful driver for the asset’s price recovery.” In a scenario where the Fed’s key rate is lowered and on-chain activity rises, Ethereum could become one of the top cryptocurrencies for long-term investors, offering them attractive returns with minimal risk.
