Recent Digital Asset Returns and Staking Potential
The global digital asset (crypto) market is worth close to three trillion US dollars. It has evolved from a niche industry to an asset class considered by institutional investors and even entire governments. Like with many traditional assets, there are two driving forces behind crypto investments: the price of the asset and the recurring income that it can generate. A significant amount of recurring income from crypto ownership is generated through staking on proof-of-stake (PoS) blockchains–a topic that we covered in our previous blog post. In this post, we summarize the current annual reward rate (ARR) of staking on several major blockchains, glance over the returns of the crypto market in recent years, and compare crypto to traditional asset classes.
Native Token Ownership and Staking Returns
Usually when discussing crypto market dynamics, the native token of a blockchain is considered. For example, the ALGO token for the Algorand blockchain. The historic performance of investing into several well-known native tokens is shown in the below table for the Dollar-cost averaging (DCA) investment strategy starting in January 2023. The table also shows the ARR from staking, as discussed in our previous blog post.
There is a large difference in DCA yield between investments in different native tokens over the course of the past two years–from DOT’s negative yield (loss) of about -19 % to SOL’s positive yield of about 226 %. While these numbers depend on the observation window, they clearly show that there are differences in the performance of different tokens. For example, ADA and BTC have shown a high return in terms of price over the past two years. On the other hand, ALGO and AVAX have shown more modest returns (AVAX had a slight loss in the considered period), while their relatively high staking ARR indicates potential in more than just the native token’s price change. In comparison, the previously mentioned ADA offers small rewards from staking for transaction validation, while BTC does not support native staking. Note that the DCA yield in the above table is based only on the native token’s price, while accumulation of staking rewards is not considered.
Various Asset Returns
Crypto investments, i.e. investments in native tokens of blockchains, have been around for more than a decade, while the past half a decade has seen significant traction. While this is a very short time period in comparison to traditional asset classes, many individuals, numerous investment funds, and even several governments have recently shown commitment to crypto assets. Below is a comparison of the yield of crypto assets to traditional asset classes using the DCA investment strategy over the course of the past two years. Several widespread indexes were chosen in the comparison for representing different asset classes.
While MarketVector’s Digital Assets 100 Index, representing the crypto market in this comparison, does not include accumulation of staking rewards, it shows that crypto still managed to significantly outperform all other asset classes over the course of the past two years. This indicates positive crypto market performance in spite of the recent price fluctuations. The S&P 500 has also shown a large yield thanks in part to good performance of the technological sector, while US bonds showed a lower yield of 5 %. Both the S&P 500 and the US bond yield in the table consider aggregation of dividends and bond yield. Commodities showed the lowest overall yield due to the performance of different components, among which gold stands out as the top performer during recent years. Note that the US inflation rate has stabilized at around 3 % during the past two years, while other jurisdictions may have experienced a different degree of inflation.
While there is no guarantee for future market performance, the staking rewards offered by different blockchains can help curb possible crypto market fluctuations and increase potential returns. Readers interested in keeping their crypto assets in their wallet (under their full control) during staking are invited to review and try out the Valar Peer-to-Peer Staking Platform: https://stake.valar.solutions
Disclaimer
This article does not constitute financial advice. All information provided is for general purposes only. Readers should conduct their own research and fully understand the risks before participating in any staking or other blockchain activities. The information provided does not address all potential risks or other relevant considerations of staking, blockchain, and financial activities.
Sources
- CoinMarketCap, crypto market overview: https://coinmarketcap.com/
- Investopedia, Dollar-cost averaging: https://www.investopedia.com/terms/d/dollarcostaveraging.asp
- Bitnovo, Native token DCA calculator: https://www.bitnovo.com/en-BE/calculator-dca
- Banker on wheels, recent asset class overview: https://www.bankeronwheels.com/the-long-game-2025-guide-to-asset-class-returns/
- Of Dollars and data, S&P 500 DCA calculator: https://ofdollarsanddata.com/sp500-dca-calculator/
- Trading economics, US Inflation: https://tradingeconomics.com/united-states/inflation-cpi
- Curvo, Bloomberg Commodity index: https://curvo.eu/backtest/en/market-index/bloomberg-commodity?currency=usd
- Curvo, Bloomberg US Aggregate Bond index: https://curvo.eu/backtest/en/market-index/bloomberg-us-aggregate-bond?currency=usd
