Coinbase has become the first cryptocurrency company to be added to the S&P 500 index. Its shares jumped nearly 15% on Tuesday following the announcement.
The crypto industry heavyweight will replace Discover Financial (DFS.N), a credit card company that is being acquired by Capital One (COF.N). The change will take effect before trading begins on May 19, according to Reuters.
Oppenheimer analyst Owen Lau told Reuters, “This is a big moment for Coinbase and the whole crypto industry. It shows that other crypto companies can also go public and join the S&P 500.”
Following the news, Coinbase’s stock reached its highest level in nearly three months, adding over $8 billion to the company’s market value.
What is the S&P 500?
The S&P 500 is one of the most important stock market indexes in the world. It tracks the performance of 500 of the largest publicly listed companies in the United States, including giants like Apple, Microsoft, Amazon, and Alphabet, the parent company of Google.
The “S&P” stands for Standard & Poor’s, the financial firm that created the index. It’s widely used as a benchmark to measure the health of the U.S. stock market and the overall economy.
To be included in the S&P 500, a company must be financially strong, publicly traded in the U.S., and among the largest by market value. So when a company like Coinbase joins the index, it’s seen as a sign that it has become a major player in the business world.
Why Did the S&P 500 Choose Coinbase?
The cryptocurrency exchange has faced a turbulent journey since going public in 2021, with its early valuation of $85 billion dropping as the wider crypto market cooled. However, a series of profitable quarters and positive regulatory signals under the administration of U.S. President Donald Trump have renewed investor confidence.
The S&P 500 considered Coinbase a strong addition, especially after the company reported a profitable first quarter posting $527 million in adjusted net income and $2 billion in revenue.
Coinbase also made headlines with a $2.9 billion deal to acquire Deribit, a major crypto derivatives platform. This move reflects the company’s ambition to dominate not only spot trading, where it already leads in the U.S, but also the larger global derivatives market, which makes up the bulk of crypto trading volume.
What Does This Mean for the U.S. Crypto Market?
Coinbase’s inclusion in the S&P 500 marks a major milestone for the U.S. crypto industry. It signals a growing acceptance of digital assets in traditional finance.
Analysts told Reuters that this move highlights the industry’s increasing legitimacy and potential for innovation, especially with the pro-crypto stance of the Trump administration.
This development could open doors for other crypto platforms like Kraken, Gemini, and Binance.US. As big investors and companies show more interest in crypto, these exchanges may pursue public listings or strategic partnerships to improve their image and expand their reach.
The road ahead seems wide open for other crypto firms to step into the spotlight and reshape the market in unexpected ways, with the next chapter still waiting to be written.