Current cost for a minimum non-pool staking share is ~$8,800 USD – is it a good time to invest for the long-term?
It’s been made clear many times the goal with implementation of Casper/sharding is to allow anyone with the means to purchase 32 ETH to be able to individually stake on the network, creating returns of around 5% annually. Based on current prices and inflation I made up some projections of possible staking rewards over time based on a current investment of 32 ETH. Of course the results are based on a number of assumptions…
This is based on YOY inflation of 7.7% (Aug 2017- Aug 2018) with the assumption that inflation will average 1.25% with Casper, and that Casper will be released by this time next year.
Also, assuming there is a chance there is an issuance reduction from 3 ETH to 1 ETH which could take place during Constantinople release, this could increase overall ROI an average of ~5.5%.
If you look at the chart you’ll see that for each marketcap teir level I have compounded the projected staking rewards for 32 ETH over 10 years. Obviously this is not realistic as the marketcap will not remain the same for a 10 year period but it does show how powerful compounded staking rewards can be to a long-term investor.
With the price as low as it is right now a ~$8,800 investment stake in Ethereum seems like a no-brainer. We’ve already reached a $120 billion marketcap without adoption or many use cases driven mostly by retail investors and speculators. When actual adoption happens and ETH is being used around the world for hundreds if not thousands of different use cases it hard to believe that it won’t become a multi-trillion dollar network someday.
Also, on the other hand assuming ETH only ever reaches and maintains a $200 bln marketcap a purchase of 32 ETH today at $275 USD could produce a return of 935% over 10 years. Even a $100 bln marketcap will produce a return of 417% over 10 years. That’s an average of 93% and 43% per year respectively.