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Ethereum’s (ETH-USD) mid-September “Merge” to a Proof-of-Stake consensus mechanism from Proof-of-Work will have a long-term benefit to cryptocurrency exchange Coinbase Global (NASDAQ:COIN), Oppenheimer analyst Owen Lau contended Wednesday.
Lau predicted that the Merge will boost the ETH staking total available market and drive Coinbase’s (COIN) diversification efforts, he wrote in a note to clients.
Coinbase (COIN) has recently taken steps to prepare itself ahead of the blockchain Merge. For instance, it recently launched wrapped staked ETH, allowing ether (ETH-USD) tokens to be staked, or locked in to earn rewards, through the exchange. That came after COIN expanded its staking offering with ETH at the start of August.
From ETH staking alone, Lau thinks Coinbase (COIN) can generate $439M gross revenue and $68M net revenue, assuming ether’s (ETH-USD) price of $2K, a staked ratio of 30%, a 4% yield and 15% market share for COIN. The world’s largest altcoin by market cap, though, is changing hands at $1.54K at the time of writing.
All in all, those ‘numbers can increase meaningfully if ETH price goes up and with increased penetration of ETH and non-ETH staking.
Similarly, J.P. Morgan analyst Kenneth Worthington said Coinbase (COIN) could be a “meaningful beneficiary” of the ETH Merge, citing its sizable market share of ETH.
Previously, (Aug. 25) Coinbase to add retail-focused nana ether futures to its derivatives platform.