TeaThat long-awaited Ethereum merger is taking place next month around September 15, and the blockchain will move from proof of work (PoW) to proof of stake (PoS).
With this, the biggest crypto companies are now announcing what the experience will be like for retail investors.
According to recent announcements, Coinbase and some other crypto exchanges are halting Ethereum and ERC-20 withdrawals and deposits in order to pave the way for a smooth merger.
Many stakeholders and retain traders are looking to maximize their profits soon as they keenly anticipate a rally in the ETH price soon. According to Wall Street bank JP Morgan, crypto exchanges could also benefit well from the much-awaited upgrade.
Coinbase for profit?
JPMorgan is predicting Coinbase to generate substantial revenue after the ETH merger.
An analyst of the bank said that “Coinbase will be a ‘meaningful beneficiary’ of the Ethereum merge. The exchange has recently taken concrete steps to maximize the value of ETH stake for its customers. This could result in higher revenue generation for the crypto exchange.”
The analyst continued, “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.”
“We estimate Coinbase incremental annual staking revenue of $650mn from the Ethereum merge based on $2,000 ETH and a 5% ETH yield. We see incremental annual staking revenue of $80-$100mn.”
Other Exchanges To Benefit Too
The JPMorgan analyst also predicted that exchanges other than Coinbase such as Binance, Gemini and the FTC could benefit from the Ethereum upgrade.
The Ethereum Merger has been delayed several times because of technical changes. Now that a tentative date has been confirmed by the CEO himself, the excitement is shooting through the roof.
The upgrade aims to move the consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS). The new mechanism is expected to reduce energy consumption and carbon footprint. Because of this, the platforms have seen a surge in popularity in recent times.
Paving The Way For ETH 2.0
As per an announcement in a blog posted on Tuesday, Coinbase said that it will be temporarily halting Ethereum and ERC-20 token deposits and withdrawals during the merge. The pause is a precautionary measure. The downtime is supposed to allow the exchange to “ensure that the transition has been successfully reflected by our systems.”
While other crypto exchanges are most likely to follow similar procedures, only Coinbase has so far provided an official notice to its users.
Reportedly, however, a Binance representative confirmed via email that the company is also planning to stop ETH and ERC-20 token deposits and withdrawals and will share further details soon.
