Ethereum Merge is a Coinbase catalyst? Shares up 6% in premarket 📈

Shares of cryptocurrency exchange Coinbase have lost nearly 80% since the beginning of the year amid declines in the cryptocurrency market and declining customer investment volume. However, the stock is gaining more than 6% today thanks to Ethereum's upcoming transition to version 2.0 and improving sentiment in the digital asset market:

• Goldman Sachs analysts forecast that online staking revenues will boost Coinbase's profits. As a reminder - the second largest cryptocurrency is changing the way it approves new transactions to an eco-friendly Proof of Stake, which will eliminate the activity of 'miners' and reduce the network's energy consumption by up to 99.5%;
• Proof of Stake will make blockchain transaction processing the responsibility of validators and node owners, who will 'block' the Ethereum cryptocurrency reserves they hold in the staking platform making them available to the network;
• Goldman's research report also states that Merge will prove to be a short-term catalyst for the growing demand for staking on the Ethereum network. The Coinbase exchange will make ETH staking available to individual and institutional customers. In addition, the exchange will also make Cardano and Solana staking available;
• Ethereum Merge is only the first of 5 massive updates with which the developers intend to adapt the network to the global demand for Ether. The Coinbase report also complements an equally 'bullish' report from JP Morgan, which indicated that Ethereum merge could prove to be a significant new source of revenue for Coinbase that month;
• Estimated additional profits resulting from the staking services settle between $250 million and as much as $600 million, assuming a 20 to 40% share of total ETH staking. Goldman Sachs also estimates rising profits resulting from higher interest rates. Coinbase, as an issuer of a cryptocurrency that mimics the U.S. dollar and reports foreign exchange reserves of the so-called stablecoin USDC (Circle), receives a share of the interest income generated from USDC reserves; 
• Goldman sees Coinbase generating between $250 million and $600 million in additional revenue from ethereum staking, assuming that about 20% to 40% of the ETH on its platform is staked. Analysts, however, remain cautious on Coinbase stock in the medium term, pointing to weaknesses in its core business model, which correlates significantly with risk sentiment and the popularity of cryptocurrency investments;
• Cryptocurrency exchange Coinbase has filed a lawsuit against the U.S. Treasury Department, which imposed sanctions on the so-called Tornado Cash smart contract, arguing the decision is anti-money laundering and pointing to Torando as a potential gateway to circumvent sanctions. Hackers and other anonymous North Korean entities laundered $1 billion worth of tokens through Tornado, according to the Treasury Department;
• According to Coinbase, regulators exceeded their authority by imposing sanctions on the software. The use of Tornado Cash has become punishable in the United States. According to regulators, about $7 billion has passed through Tornado Cash as of 2019; however, Coinbase points out that the contract was also used to help war-stricken Ukraine.

Coinbase (COIN.US) chart, D1 interval. The recent gains caused by the BlackRock fund contract reacted by falling to the 23.6 Fibonacci retracement level  at $118. The stock is still trading well below the 200-session SMA200 average. However, the price has been moving in a sideways trend since May 2022, from which it has tried to break out of the top several times. The 6% gap at the opening heralds the area around $80 and a possible demand attack near the psychological support at $100 if the sentiment in the cryptocurrency market persists. Source: xStation5