JPMorgan Sees Ethereum Merge Spelling $650M Revenue Opportunity For This Crypto Exchange

Research from JPMorgan Chase & Co. JPM finds that crypto exchange Coinbase Global Inc COIN stands to gain significantly from the upcoming Ethereum ETH/USD Merge.

What Happened: An increase in staking revenue after the Merge will have a positive impact on Coinbase, explained JPMorgan analyst Kenneth Worthington in a note seen by CoinDesk.

The bank estimates that Coinbase has a 15% stake in ETH assets, which exceeds its 7% share of the overall crypto ecosystem. This market share of ETH is likely geared towards institutional clients that are more likely to own BitcoinBTC/USD and ETH.

As such, JPMorgan further estimated that Coinbase can make an incremental annual staking revenue of $650 million from the Merge. The calculations were made assuming ETH was priced at $2,000 with a 5% yield from staking.

Coinbase estimates that the average Ethereum staking yield will be much higher after the Merge. In a note to clients in February, the crypto exchange said that it expects staking yields to be between 9% and 12% per annum.

“Coinbase is bigger in [ether] than was intuitive to us, thus leading directly to a bigger revenue opportunity,” Worthington said in the note.


Price Action: Coinbase shares traded nearly 1% higher at $86.25 in the premarket session, as per data from Benzinga Pro.

At press time, ETH was trading at $1,854, up 0.4% over the last 24 hours.

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Posted In: Analyst ColorCryptocurrencyLong IdeasNewsMarketsAnalyst RatingsMediaTrading IdeasEthereumEthereum MergeJPMorgan