Coinbase (COIN): How Will The Merge Affect Your Crypto Investments?

Sat 20 August 2022 ▪ 9.00 o’clock ▪

5
min read – by
Mikaia ANDRIAMAHAZOARIMANANA

The Ethereum Merge is said to take place around September 15th. For some, this redesign marks the respect for the environment by the initiators of cryptographic projects. For others, the worst is to fear for their ETH holdings. Coinbase therefore puts the dot on the “i” to clear their doubt.

Coinbase Goes On Standby During The Merger

After 6 years of work, the Ethereum team announced the completion of the merger. the migration of Proof of Work to the Proof-of-Stake takes place between 15 and 19 September.

This famous merger is sure to bring crucial benefits to the Ethereum ecosystem and the cryptocurrency world. Not to mention the reduction in network energy consumption of up to 99.95%.

As a precaution, Coinbase has decided to pause Ethereum and ERC-20 token deposits and withdrawals from time to time.

explanation:

Pausing deposits and withdrawals during an asset upgrade is standard procedure. »

As a reminder, this practice is not new in an upgrade context like The Merge. Because Coinbase also chose to put the same features on standby:

  • in 2017, during the split of Bitcoin and Bitcoin Cash;
  • in 2018 and 2020, at the time of the hard fork of Bitcoin Cash.

Peace of mind is the big advantage of this short trading pause. Except Coinbase should listen better to this measure, otherwise it would affect the price of ether as well as traders’ ability to enter and/or exit positions.

When will this break take place?

Coinbase has not released any details about the exact timing of the suspension of deposits and withdrawals on its platform. However, on Twitter, the company clarified that:

At the moment we plan to pause deposits and withdrawals for a short time only. We can’t say for sure until the merger starts. »

There is also this promise from Coinbase to keep all of its users’ ETH holdings in a safe place during the merge. Reason why the latter are requested not to take any action until the green light is given. This is the ideal stance before the emergence of ETH2 tokens, if there will be any.

Recommendations for customers of Coinbase Prime, Coinbase Exchange, Coinbase Commerce, Coinbase Cloud and Coinbase Wallet users are available on the US exchange’s blog.

It should also be noted that these types of practices can be adopted by other cryptocurrency exchanges. For example, Binance has already blown a possible pause in trading with ETH and ERC-20 tokens to decrypt.

Coinbase, a beneficiary” significant » post-The Merge

JPMorgan believes that US exchange Coinbase is in a good position to profit from the Ethereum merger. The reason is that its institutional and retail clients can derive additional value from it by deploying ETH.

Here’s the explanation from JPMorgan stock analyst Kenneth Worthington on Coindesk:

Currently, Coinbase is said to have a 15% market share of ETH assets. That is more than half of the total crypto ecosystem. However, this market share is more focused on institutions with bitcoins and ethers. With retail customers increasingly focused on: more speculative tokens “.

Coinbase is bigger in [ether] than was intuitive to us, leading directly to a greater revenue opportunity.” he had indicated.

In addition, after the Merger, JPMorgan forecast additional annual strike revenue of $650 million for Coinbase. This is likely to happen when ETH hits a bottom price of $2,000 and shows a return of 5%.

We can dwell on the other scenarios for a long time after the merge. Nevertheless, let’s agree with what seems to be crucial information in this article, the suspension of withdrawals and deposits of ETH and ERC-20 tokens before, during and maybe a few days after this migration. If you’re already on Coinbase or are planning to integrate it soon, consider researching the status of this exchange before proceeding with any operation. And this goes for other cryptocurrency exchanges as well.

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Mikaia ANDRIAMAHAZOARIMANANA avatar

Mikaia ANDRIAMAHAZOARIMANANA

The blockchain and crypto revolution is underway! And the day the impact will be felt on the world’s most fragile economy, against all odds, I’ll say I had something to do with it

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