COIN - If Ethereum Pulls Off the Merge It Could Be a Game-Changer for Coinbase
If Ethereum (CRYPTO: ETH) actually pulls off the Merge on Sept. 15, it has the potential to boost overall positive sentiment around crypto and entice more retail investors to enter the market. That would be good news for embattled cryptocurrency exchange Coinbase Global (NASDAQ: COIN) , which has been struggling to boost its monthly user numbers and generate more trading revenue on its platform.
But that's just the first half of the story. Since Ethereum will be transitioning to a proof-of-stake blockchain as a result of the Merge, it will generate more interest in staking, which is the process by which investors earn interest on crypto by loaning it out to others. Coinbase has stated that it would like to become the No. 1 staking provider in the world and has already taken steps to make it easier for both retail and institutional investors to stake their Ethereum. As a result, Coinbase could have two ways to win from the Merge.
Staking could be a fantastic way to attract new retail crypto investors who may not be familiar with the concept. With crypto staking , customers agree to "lock up" their crypto for a specific time frame in return for earning rewards. Right now, for example, Coinbase is offering 3.28% staking rewards for Ethereum. You can literally make an extra 3.28% each year in passive income simply by staking Ethereum on Coinbase. So, as long as Coinbase is able to offer competitive market rates, it will attract new retail investors.
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If Ethereum Pulls Off the Merge, It Could Be a Game-Changer for Coinbase