Bitcoin News Today: Robinhood's S&P 500 Inclusion Signals Retail Trading's New Maturity

Robinhood Markets Inc. (HOOD) has been added to the S&P 500 index, marking a significant milestone for the financial-technology company and a boost to its stock price. The inclusion comes as part of a quarterly reshuffling of the index, with the change taking effect on September 22. Robinhood’s shares surged 7% in after-hours trading following the announcement, pushing the stock past $108 per share, a level not seen since mid-2022. The stock has appreciated by more than 150% year-to-date, reflecting the company’s continued recovery and evolving business model [3].

Robinhood’s inclusion in the S&P 500 is seen as a validation of its transformation from a high-risk, speculative stock during the 2021 retail trading frenzy into a more stable, diversified platform. The company reported second-quarter earnings of $386 million, with total revenue reaching $989 million—45% higher than the same period in 2023 and exceeding analyst expectations of $913 million. Earnings per share came in at $0.42, surpassing forecasts of $276.6 million in profits [3].

The S&P 500 update also added AppLovin Corp. and Emcor Group Inc., while removing MarketAxess, Caesars, and Enphase. The index reshuffle, which occurs on the first Friday of the last month of the third quarter, is conducted by S&P Dow Jones Indices to ensure the index reflects current market conditions and company performance [1].

Notably absent from the update was Bitcoin-focused company Strategy, despite its market capitalization of $95 billion, which exceeds the S&P’s inclusion threshold. Strategy, which rebranded from MicroStrategy, holds over $70 billion in Bitcoin and has been a pioneer in the digital-asset treasury strategy. Its exclusion, while disappointing to some analysts, highlights the S&P’s emphasis on traditional financial metrics and operational stability, despite the growing influence of crypto-related firms.

The broader market has shown increased interest in digital assets, with a favorable regulatory and political environment spurring institutional investment. Coinbase, another major player in the crypto space, was added to the S&P 500 in May 2024, signaling a shift in investor sentiment toward crypto-friendly firms. Robinhood, too, has seen a resurgence in its core business, with transaction-based revenues from options and equities rising to $265 million and $66 million, respectively, in the second quarter [3].

While Robinhood’s crypto trading revenue dipped quarter-over-quarter to $160 million, the 98% year-over-year increase demonstrates the ongoing relevance of digital assets in its revenue model. The company has adapted to a cooling market by diversifying its revenue streams and focusing on options trading, which has become a key driver of profit. Despite the volatility in crypto trading revenue, Robinhood’s overall financial performance and strategic shifts have contributed to its inclusion in one of the most closely watched equity indices in the world [3].

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[1] Robinhood finally gets a place in the S&P 500. These other ... (https://www.marketwatch.com-story-s-p-500-changes-are-due-out-soon-and-this-could-be-a-big-update-7dfb8e8b)

[2] S&P 500® | S&P Dow Jones Indices (https://www.spglobal.com/spdji/en/indices/equity/sp-500/)

[3] Robinhood Set to Join S&P 500 as Bitcoin Giant Strategy ... (https://finance.yahoo.com/news/robinhood-set-join-p-500-212855353.html)