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Research from JPMorgan Chase & Co. (NYSE:JPM) finds that crypto exchange Coinbase Global Inc (NASDAQ:COIN) stands to gain significantly from the upcoming Ethereum (CRYPTO: ETH) 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 Bitcoin(CRYPTO: BTC) 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.
See Also: HOW TO STAKE ETHEREUM
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.
