Coinbase Joins S&P 500 As Crypto's First Pure-Play Firm Shares Rise 8%

Coinbase Global is poised to make history as the first digital asset firm to join the S&P 500 index on the 19th of May. This significant development comes as Discover Financial Services is set to be acquired by Capital One, paving the way for Coinbase to take its place in the index. This move represents a major intersection between traditional finance and the crypto sector, signaling a growing acceptance of crypto firms within the institutional investment community.

The inclusion of Coinbase in the S&P 500 is anticipated to drive substantial demand for its stock. Funds that track the index will now be obligated to include COIN shares in their portfolios, which is likely to boost investor confidence and further legitimize the crypto industry. Coinbase is expected to enter the index as a lower-weighted firm, but its presence underscores the increasing recognition of crypto's role in the U.S. economy.

Investor enthusiasm for Coinbase has already surged, with its shares rising 8% in after-hours trading and closing 4% higher earlier that day, bringing its market cap to $52.8 billion. Coinbase CFO Alesia Haas described the move as a “major milestone” for the company and the broader crypto ecosystem, stating that joining the prestigious index reflects the progress made by Coinbase and the industry, and serves as a signal of the direction the world is heading.

At the time of reporting, Coinbase was trading at $226 in after-hours markets, significantly below its December peak of $343. Since its Nasdaq debut in April 2021 under the ticker COIN, it has remained the largest publicly traded pure-play crypto firm. While its market cap once reached $85 billion at launch, it now sits around $53 billion. In February, analyst Owen Lau predicted Coinbase’s potential S&P 500 inclusion, citing five consecutive months of growth and reaffirming a bullish $388 price target.

Coinbase’s upcoming entry into the S&P 500 highlights its growing influence in both the U.S. spot and crypto derivatives markets. This expansion is bolstered by its recent $2.9 billion acquisition of Deribit. Unlike companies such as PayPal, Visa, and Block, which offer crypto services, Coinbase stands out as the only pure-play crypto firm to meet the index’s strict criteria. MicroStrategy, despite its substantial Bitcoin holdings, continues to fall short due to profitability requirements.

Following this development, Coinbase Asset Management President Sebastian Bea hinted at a possible change in how the U.S. values its gold reserves. This accounting adjustment could unlock nearly $100 billion in budget-neutral capital. Although this is unrelated to Coinbase’s S&P 500 listing, the timing underscores the firm’s increasing involvement in broader economic discussions.