Staking, in our opinion, is the next generation of savings accounts enabled by cryptocurrency. It’s an easy way to secure your stakable assets and rest easy knowing it is growing passively.
But don’t just take our word for it. StakingRewards, a leader in tracking staking rewards, surveyed their large (and, let’s admit, savvy) user base, and these are the top reasons they found.
We’ll dive deeply into the top 2 reasons why people stake.
1. Building long-term wealth is the main reason
With the vast majority selecting “building long-term wealth” as their primary reason for staking, it’s clear to see why. Staking is the perfect way to grow your wealth without taking part in other methods to grow wealth, like investing, trading or other high-risk activities.
Staking crypto is akin to a crypto savings account, a long-trusted method for individuals to store their hard-earned assets. But traditional savings accounts have been unattractive due to their very low-interest rates. Traditional savings accounts, even in 2023, rarely can exceed 2%, and those are designated as high-yield interest accounts, which account for a very small percentage of savings accounts held in traditional banking.
That’s not to say we don’t like savings accounts; we think they are a critical part of an individual’s financial picture and think everyone needs an easy-to-access safety net for unexpected expenses, like hospital bills, big ticket item replacements (like appliances) or other random expenses that come up in life.
2. Waiting out the bear market
2022 was the start of an intense downturn in the crypto market (known as a crypto winter), with many top coins losing upwards of 80% of their value. There is no doubt that crypto is very volatile.
But staking helps here, too, for those who constantly check CoinMarketCap for the daily price changes. Knowing your assets are growing in a staking account means you’re less impacted by the daily, weekly and even yearly changes. Your crypto will keep growing regardless of the market.
Those who keep staking can wait until the market improves before selling their assets, leading to greater returns.
So, we’ve covered 2 great reasons why people stake, and if you’re new to staking, we’re here to help.