Kenneth Worthington, an analyst at JPMorgan, said digital currency exchanges like Coinbase are the “beneficiaries” of Ethereum’s long-awaited proof of work (PoW) to proof of stake ( PoW) transition will end up being a key “beneficiary” of that transition. based on a 2k ethereum price and a 5% ethereum yield, Worthington said The Merge could boost Coinbase’s annual revenue from staking services by $80 million to $100 million He explained that The Merge could.
While market strategists at financial giants focus on The Merge, JPMorgan analysts say staking revenue could bolster Coinbase
29, the Ethereum network is expected to implement The Merge around September 15, 2022, which would be a very big deal for the chain, which has operated as a PoW blockchain for seven years. This is because the network will be fully transitioning to a PoS distributed ledger system.Four days ago, Bitcoin.com News reported that JPMorgan (NYSE: JPM), a strategist, said that Ether miners will be forced to mine another Ethash-based cryptocurrency reportedly said that Ethereum Classic (ETC) will benefit from The Merge because it will be forced to mine another Ethash-based cryptocurrency.
This week, JPMorgan analyst Kenneth Worthington explained in a note to investorsthat the crypto exchangeCoinbase Global(Coinbase Global) explained that (Nasdaq: COIN) could be a “meaningful beneficiary” ofTHE MERGEThe investment bank analyst also noted that staking revenues could also enhance exchanges such as FTX, Binance, and Gemini.
“We see the staking revenue opportunity as being (proportionally) greater than the revenue opportunity, given that institutional staking customers are expected to contribute meaningfully to (ether) staking revenue, but less so for institutional customers,” said Worthington “The bulk of the economics are in retail. The bulk of the economics are in retail,” the JP Morgan analyst added. Validator 32 To become ether, you have to stake yourself, but many exchanges offer ethereum staking services with negligible threshold requirements to earn income from staked assets.
JP Morgan’s Worthington estimates that the merger could increase Coinbase’s revenue up to $100 million.
At the time of writing, Coinbase is one of the largestETHholders in terms of validators, according tothe ETH Staking dashboard hosted at Dune Analytics. one of the largestETHholders in terms of validators. Of the 13,326,533 ether deposited into Ethereum 2.0 contracts, Coinbase commandeered 14.7% or 1,966,080 ETH. JP Morgan’s Worthington expects Coinbase to benefit greatly from staking fees.
“We estimate Coinbase’s incremental annual staking revenue from the Ethereum merge at $650 million, based on a yield of $2,000 (Ether) and 5% (Ethereum). We see $80 million to $100 million in incremental annual staking revenue,” Worthington’s note elaborates.
Year-to-date, COIN is down 65.04% from this year’s high of $357 per share, but its current price of $85.44 is up from the low of $47 seen on June 30. Additionally, on August 16, Coinbase summarized what customers “need to know” about the upcoming PoW to PoS transition in ablog postDuring The Merge, Coinbase will “temporarily” suspend Ethereum trading and process withdrawals and deposits during the change not process withdrawals and deposits during the change.Coinbase’s suspension rules further apply to ERC20-based tokens built on top of the Ethereum network.
On August 14, Coinbase and many exchanges were asked: “If regulators asked us to censor in ethereum validate and censor at the protocol level or: (A) comply and censor at the protocol level (B) stop staking services and maintain network integrity.” They said. Coinbase Co-Founder and CEOBrian Armstronganswered this question three days later on August 17 on Twitter.
“It’s virtual we don’t really face where we want to.” Armstrongwroteon Thursday. “But if faced with it, I think we’d choose (B). We must focus on the bigger picture. Because (C) may be a better option, or a legal challenge to a better outcome.”
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