Is ETH Staking Worth It When a 10-Year Treasury Pays 5.17%?

ETH staking currently offers an annual return of about 2.8% in Ethereum (CRYPTO: ETH). In contrast, a 10-year Treasury note has been yielding 5.17% in U.S. dollars as of September 25, 2026. This means anyone staking ETH starts at a disadvantage of about 2.4 percentage points, before considering any changes in ETH’s market price. Additionally, ETH has declined significantly by 35.2% over the past year.

To break it down, if you invest $10,000 in a Treasury, you’ll earn about $517 each year, backed by the U.S. government. On the other hand, a staker would receive about $280 worth of new ETH at the current price, a figure that can fluctuate with market conditions. This raises an important question: can ETH staking compete with the stability offered by Treasury notes for those needing reliable income?

A 10-Year Treasury Pays a Fixed 5.17%, and the Government Guarantees It

A Treasury note represents a loan to the U.S. government. Investors receive semiannual interest payments, known as coupons, and the principal is returned at maturity. Therefore, anyone who holds a Treasury note until it matures knows exactly how much they will earn, making it a reliable investment.

The current yield curve shows that longer-term loans generally pay more interest. For example, as of late September, three-month Treasury bills yielded 4.24%, one-year notes yielded 4.50%, two-year notes yielded 4.81%, and the 10-year note we’re discussing yielded 5.17%.

These adjustments are influenced by the Federal Reserve’s benchmark rate, which was raised to a range of 3.75% to 4% effective September 16. This affects short-term yields as well as longer-term rates, as investors anticipate future interest rates and inflation.

However, while the Treasury guarantees fixed coupon payments and the return of the face value, it doesn’t guarantee the note’s market price during its holding period. If interest rates rise after purchase, older notes with lower coupon rates will decrease in market value, leading to potential losses if sold prematurely. Additionally, inflation can erode the purchasing power of those fixed annual payments.

ETH Staking Pays About 2.8% in ETH, and the Rate Can Change Every Week

ETH staking operates on a proof-of-stake model, where ETH holders lock up their coins to support the network’s validators, which confirm transactions. In return, these validators receive new ETH and a portion of transaction fees, resulting in staking rewards currently around 2.8% per year.

Many people stake their ETH through exchanges, pools, or liquid staking services, with each provider taking a share of the rewards. However, as more ETH is staked, the available rewards are divided among all stakers, which can lower returns. By August, 34% of all ETH had already been staked. Unlike Treasury notes, the staking rate can change weekly, with no fixed promise of what it will be.

Furthermore, ETH staking comes with risks that government-backed Treasuries do not face. When you want to withdraw your staked ETH, you may have to wait in a queue that can span several days or even weeks. If a validator breaks the rules, they can face penalties and lose a portion of their staked ETH, known as slashing. Plus, staked ETH doesn’t have the same government insurance or guarantees as a Treasury.

ETH Fell 35% Over the Year, Which Erased More Than 15 Years of Rewards

Staking rewards can quickly diminish if ETH’s price drops. With the current value at $2,674—down 9.5% for 2026, 35.2% over the last year, and 46% below its peak of $4,946 in August 2025—a staker who held on to their ETH during this downturn essentially collected 2.8% more coins, but each of those coins is now worth considerably less.

To put this in perspective, a staker would need more than 15 years of staking rewards just to recover losses from that 35% drop in value, making it difficult for those relying on staking as a source of income.

That being said, there’s potential for significant gains if the market shifts. For instance, ETH recently surged by 71% in just 90 days. A staker who took advantage of that upward trend benefited not only from rewards but also from ETH’s price increase. In contrast, a Treasury note’s income remains fixed and cannot benefit from such fluctuations.

Treasury Interest Skips State Tax, While Staking Rewards Are Taxed on Arrival

When it comes to taxes, there are differences to consider. Interest from Treasury notes is taxed as ordinary income at the federal level but is exempt from state and local income taxes, which can benefit investors in high-tax states.

In contrast, rewards from staking ETH are also considered ordinary income by the IRS and are taxable at their market value the moment you gain control of them—this tax applies even if the value of ETH drops later and even if you don’t sell your coins. Additionally, staking rewards are fully taxable at the state level.

Both income types will influence your overall tax burden and may affect how much of your Social Security benefits are taxed and your Medicare premiums. Treasuries are also easier to manage within an IRA, whereas staking ETH in a retirement account can be more complicated and involves reporting frequent small rewards.

Is ETH Staking Worth It Against a 5.17% Treasury?

In conclusion, ETH staking doesn’t seem to be a competitive income source when stacked against the reliable 5.17% offered by Treasury notes. The Treasury provides nearly double the return in stable dollars, complete with a government guarantee and a state tax advantage. Meanwhile, staking offers about 2.8% in a volatile asset that dropped 35.2% in a single year.

For those who already own ETH and want potential growth, staking may still be attractive. However, those seeking consistent income may find the Treasury to be the better option, even with the cost of giving up ETH’s upside, like the recent 71% price jump, should market conditions change.

If the Federal Reserve reduces rates, newly issued Treasuries could pay less, potentially narrowing this gap, while a sustained rally in ETH could make staking more appealing in the future.

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