Even as the cryptocurrency market anticipates Ethereum Merge, many stakeholders are looking to maximize its outcomes. As per Wall Street bank JP Morgan, crypto exchanges could also benefit well from the much anticipated upgrade. Retail traders, on the other side, could be looking to take profits from a possible ETH price rise immediately after the rise.
Coinbase Could Benefit Substantially From Ethereum Merge
Meanwhile, JP Morgan predicted that crypto exchange Coinbase could gain substantial revenue with the upcoming Merge. COINBASE would be a ‘meaningful beneficiary’ of the Ethereum Merge, said an analyst from the big bank. The exchange took “concrete steps recently to maximize the value of ETH staking for its clients.” This could result in higher revenue generation for the crypto exchange, the analyst added.
“We see the staking revenue opportunity bigger (proportionally) than the income opportunity given we expect Institutional staking clients will contribute meaningfully to ETH staking revenue, but much less so for Institutional customers. The vast majority of the economics remains with retail.”
“Binance Too Could Gain Revenue”
Not just Coinbase, but other exchanges like Binance, Gemini, and FTX could also benefit from the Ethereum upgrade, the JP Morgan analyst said. “We estimate Coinbase incremental annual staking revenue from the Ethereum merge of $650mn based on $2,000ETH and a 5% ETH yield. We see incremental annual income of $80-$100mn of staking income.”
Although the timeline is subject to technical changes, the Ethereum Merge is tentatively scheduled for September 15. The upgrade will enable a shift of consensus mechanism from Proof of Work to Proof of Stake. The new mechanism is expected to reduce energy consumption in Ethereum mining. The anticipation and preparedness for the Merge has also led to price rise in the recent times. Last week, Ethereum (ETH) rose to a recent high of just above $2,000, rising hopes of a bullish trend. As of writing, Ethereum price stands at $1,830.98, down 2.99% in the last 24 hours, according to CoinMarketCap.
