Coinbase Shares Surge 8% on S&P 500 Inclusion

Coinbase, the largest crypto exchange in the U.S., is set to join the S&P 500, the stock market index tracking the financial performance of 500 leading companies. This move marks a significant milestone as Coinbase will be the first pure-play crypto firm to be included in the benchmark index, replacing Discover Financial Services. The news has led to an 8% surge in Coinbase’s shares in aftermarket trading, with the stock currently trading at around $226 in after hours trading, down from an all-time high of over $343 set in early December. The listing will take effect before trading on May 19.

Coinbase went public on April 14, 2021, through a direct listing on the Nasdaq under the ticker COIN. It is the largest publicly traded pure-play crypto firm, with a market capitalization of around $53 billion. COIN’s market cap peaked at around $85 billion at its debut. In February, Oppenheimer analyst Owen Lau predicted Coinbase could soon list on the S&P 500, following five straight months of growth for the firm. Lau maintained his “buy” rating and raised his price target to $388.

Addition to the S&P 500 requires positive earnings in the most recent quarter and the sum of the prior four quarters. Coinbase’s earnings have been inconsistent due to the volatility of the cryptocurrency market. For example, the exchange reported strong revenue of $7.4 billion in 2021 and a loss of $1.1 billion in Q2 2022. However, the exchange has benefited from the more permissive regulatory environment under the Trump administration. Several rival exchanges, including Bullish, Gemini, and Kraken, have also hinted they are looking to go public due to favorable regulatory conditions.

Coinbase reported $527 million in adjusted net income for Q1 2025. Its total revenue of $2 billion was down from $2.3 billion in Q4 2024 in the same period. First-quarter transaction revenue dipped 19% to $1.2 billion as trading volume dipped 10%. Earlier this month, Coinbase agreed to acquire crypto derivatives exchange Deribit in a $2.9 billion deal. The move will enable the exchange to expand its growing derivatives division. Derivatives trading makes up a far greater percentage of total crypto volumes than spot markets, which Coinbase dominates in the U.S.

Other firms listed in the S&P 500, including Block, PayPal and Visa, provide crypto services. MicroStrategy, which holds billions of dollars worth of bitcoins, is not in the S&P 500 due to its smaller market capitalization. The inclusion of Coinbase in the S&P 500 is a testament to the growing acceptance and legitimacy of cryptocurrencies in the traditional financial markets. This move is expected to attract more institutional investors to the crypto space, further boosting the industry's growth and development. The addition of Coinbase to the S&P 500 index is a significant step forward for the cryptocurrency industry, as it provides a level of credibility and stability that was previously lacking. This development is likely to encourage other crypto firms to seek similar recognition, further integrating the crypto market with traditional financial systems. The inclusion of Coinbase in the S&P 500 index is a clear indication of the increasing mainstream acceptance of cryptocurrencies. This development is expected to have a positive impact on the overall crypto market, as it provides a level of legitimacy and stability that was previously lacking.