Coinbase (COIN): How will The Merge affect your crypto investments?

It is said that the Ethereum Merge will take place around September 15th. For some, this redesign marks the respect of the environment by the initiators of cryptographic projects. For others, the worst is to be feared for their ETH holdings. Coinbase therefore puts the point on the “i” in order to appease their doubt.

Coinbase will go into stand-by during the Merger

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

Surely, this famous Merger will bring crucial benefits to the Ethereum ecosystem and the cryptocurrency world. To mention only the reduction of the energy consumption of the network up to 99.95%.

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


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

As a reminder, this practice is not new in an upgrade context such as The Merge. Because Coinbase had also chosen to put the same features on stand-by:

  • in 2017during 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 major benefit of this short-term trading pause. Except that Coinbase had better listen to this measure lest it affect the price of ether as well as the ability of traders to enter and/or exit positions.

When will this break take place?

Coinbase has not issued any details as to the exact timing of the suspension of deposits and withdrawals on its platform. On Twitter, however, the company clarified that:

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

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

Recommendations for Clients of Coinbase Prime, Coinbase Exchange, Coinbase Commerce, Coinbase Cloud, as well as Coinbase Wallet users are available at the blog of the American exchange.

It should also be noted that this kind of practice could be adopted by other cryptocurrency exchanges. Binance, for example, has already blown a possible pause in trading with ETH and ERC-20 tokens at Decrypt.

Coinbase, a beneficiary “ significant » post-The Merge

JPMorgan believes that US exchange Coinbase is in a good position to benefit from the Ethereum merger. The reason is that its institutional and retail clients will be able to obtain additional values ​​from it through ETH staking.

Here is JPMorgan equity analyst Kenneth Worthington’s explanation of Coindesk :

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

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

Additionally, JPMorgan predicted additional annual staking revenue of $650 million for Coinbase after the Merger. Probably, this will take place when ETH reaches a floor price of $2,000 and exhibits a yield of 5%.

We can dwell at length on the other post-Merge scenarios. Nevertheless, let us agree to what seems to be crucial information in this article, the suspension of withdrawals and deposits of ETH and ERC-20 tokens before, during and perhaps a few days after this migration. If you are already on Coinbase or if you plan to integrate it soon, consider scrutinizing the status of this exchange before proceeding with any operation. And this is also valid for other cryptocurrency exchanges.

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