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Coinbase (COIN) Seen as a 'Meaningful Beneficiary' of the Ethereum (ETH) Merge

August 17, 2022 8:27 AM EDT
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JPMorgan analyst Kenneth B. Worthington believes Coinbase (NASDAQ: COIN) will be a “meaningful beneficiary” of the Ethereum (ETH) Merge.

The analyst notes that the crypto exchange has taken concrete steps recently “to maximize the value of Eth staking for its clients,” which should results in higher revenue generation for itself.

“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,” Worthington said in a client note.

The Ethereum Merge is likely to take place around September 15 and is considered to be one of the most important milestones in the history of cryptocurrencies. Coinbase is estimated to have a 15% market share of ETH assets.

“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,” Worthington added.

In addition to Coinbase, Worthington says that FTX, Gemini, and Binance are also likely to benefit from the Merge.

By Senad Karaahmetovic



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JPMorgan, Senad Karaahmetovic