JP Morgan Analyst Bullish on ETH 2.0: Opportunity for Rapid Returns

JPMorgan is bullish on industries built around the Ethereum blockchain, estimating that the current annual staking revenue reaches as high as $9 billion. With Ethereum 2.0 on the horizon, JPMorgan predicts that Ethereum's staking revenue will double to $20 billion next year and has the potential to double again to $40 billion by 2025.

JPMorgan Chase, one of the world's largest investment banks and once a staunch opponent of cryptocurrencies, with CEO Jamie Dimon calling Bitcoin and the crypto industry a "fraud" in 2017.

Now, two senior analysts at JPMorgan Chase pointed out in their latest report that with the Ethereum upgrade 2.0 next year and the adoption of the Proof of Stake (PoS) mechanism, the future of Ethereum will be limitless, and its value will grow rapidly.

The Ethereum blockchain currently uses the Proof of Work (PoW) verification mechanism, where miners contribute computing power to complete the verification. Bitcoin also uses this method, which is criticized for its energy consumption. However, Ethereum is set to transition from PoW to Proof of Stake (PoS) next year. This is one of the key points that analysts are optimistic about.

JPMorgan Chase analysts believe that Staking will create and distribute cryptocurrencies in a more energy-efficient manner. As an asset class, "Staking will make the crypto ecosystem more attractive, and this Staking may become the main source of income for retail and institutional investors."

In simple terms, under the PoW mechanism, blockchain data is kept in sync and secure because miners ensure the data's security by solving complex puzzles. PoS changes this verification mechanism to Staking, where users agree to lock funds in the network to help verify transactions, somewhat like providing collateral to ensure data security, efficiency, and reduce congestion issues.

Therefore, when Ethereum fully adopts the PoS mechanism, energy consumption will be reduced by up to 99%, and it will significantly activate the flow of funds on Ethereum. Investors can generate remarkable interest income through Staking. In essence, the Ethereum you hold can generate income in various ways.

Therefore, JPMorgan Chase's latest report titled "A Primer on Staking—The Fast Growing Opportunity for Cryptocurrency Intermediaries and Their Clients" indicates that after the Ethereum upgrade, Proof of Stake will become more attractive, with Staking income projected to reach $40 billion by 2025.

JPMorgan Chase also mentioned that if Proof of Stake becomes popular, cryptocurrency intermediaries like Coinbase will earn more. By the end of 2025, Coinbase's Staking income could reach up to $500 million, and equity proof-of-stake crypto assets like Polkadot and Cardano could appreciate.

This article is authorized and reproduced from Horizon News Network