Coinbase Expects Ethereum Staking Yields To Hit 12% APR After The Merge!

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Crypto exchange Coinbase Global Inc

COIN

-1.52%

projects that the annual interest earned from staking Ethereum

ETH

could double over the next few months.

What Happened: In a note to clients on Thursday, Coinbase said it expects Ethereum staking yields to increase after Ethereum’s main net merges with the Beacon Chain in June, seeing as the rewards will incorporate net transaction fees paid to miners.

“We estimate that staking yields could rise from around 4.3%-5.4% APR to upwards of 9%-12% APR,” said Coinbase.

Coinbase expects ETH staking yields to rise to 9-12% APR post-merge. pic.twitter.com/ST6VcGjQDG

Staking is a common way to earn passive income in the crypto space. According to data from StakingRewards, Ethereum has $25 billion in staked value and ranks second behind Solana

SOL+0.18%

+ Free Alerts

, which has $35 billion in total staked value.

Last year, JPMorgan Chase & Co.

JPM+2.38%

+ Free Alerts

estimated the post-merge era when Ethereum 2.0 comes into effect could create a $40-billion staking industry by the year 2025.

“Yield earned through staking can mitigate the opportunity cost of owning cryptocurrencies versus other investments in other asset classes such as U.S. dollars, U.S. Treasuries, or money market funds in which investments generate some positive nominal yield,” said the JPMorgan analysts.

In fact, in the current zero rate environment, we see the yields as an incentive to invest.”

ETH Price Action: As of Friday morning, ETH was trading at $2,729, gaining 10.99% in the last 24 hours.

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