Coinbase to benefit meaningfully from ethereum merge, analyst says

"We see Coinbase (NASDAQ:COIN) as a meaningful beneficiary of the Ethereum Merge," JPMorgan analyst Kenneth Worthington wrote in a note to clients Wednesday. Ether's (ETH-USD) long-awaited transition to Proof-of-Stake from Proof-of-Work is forecasted to take effect on September 15. That's because Coinbase Global (COIN), America's largest cryptocurrency exchange by daily trading volume, has a larger market share of ether (ETH-USD) assets (15%) than the 7% share it has of the overall crypto ecosystem, thus positioning itself for a bigger revenue opportunity, Worthington noted. "This larger market share is likely weighted towards institutions that we expect will lean to owning Bitcoin (BTC-USD) and Ethereum (ETH-USD), while we expect retail might traffic more in the more speculative tokens," such as dogecoin (DOGE-USD) and shiba inu (SHIB-USD), Worthington wrote. Furthermore, the company expanded its staking offering with ether (ETH-USD) at the beginning of August, according to a blog post. Note that staking allows users on Coinbase Prime to earn annual rewards by locking in their tokens.Worthington is expecting Coinbase's (COIN) incremental annual staking revenue from the ether merge to be $650M assuming an ETH price of $2K and a 5% ETH yield. Most of those proceeds will be driven by retail investors, he added. Last week, (August 12) Coinbase credit rating cut at S&P on weak earnings, market share loss.