Coinbase Global (NASDAQ:COIN) shares advanced 6.5% in Friday premarket trading as Daiwa Securities upgraded America's largest cryptocurrency exchange by trading volume to Buy from Outperform. Daiwa pointed out that Coinbase (COIN) is one of the largest ETH holders globally, as it holds nearly 15% of all circulating ethereum (ETH-USD) on its platform, according to a note written to clients. In turn, the company "should be a key beneficiary of increased ETH staking demand" after ether (ETH-USD) merges to a Proof-of-Stake consensus mechanism from Proof-of-Work in the coming days, Daiwa contended. COIN's total staking revenue is estimated to be $554M in 2023, representing a Y/Y jump of 73%, Daiwa wrote, adding that its staking revenue contribution could increase to 15% in Q4 2023 from 9% in Q2 2022. That would help "the company diversify its revenue away from more-cyclical trading revenue."Perhaps the intraday upswing in COIN shares was helped by a broad risk-on day in crypto, with bitcoin (BTC-USD) jumping almost 10% to $20.97K, and ether (ETH-USD) perking up 5.2% to $1.70K at the time of writing. Earlier this week, Oppenheimer analyst Owen Lau said Coinbase will have a long-term benefit from ether's Merge.
