Coinbase will join the S&P 500 index on May 19, replacing Discover Financial Services since the latter is undergoing an acquisition process. The crypto exchange witnessed its stock rise 8% in post-market trading due to this news released late last Monday.
The acquisition of Discover by Capital One helped it to qualify for the S&P 500 since S&P 500 requires listed firms to have consistent profitability. Last quarter, the firm recorded $65.6 million in profits, although this was a decrease from last year.
Its revenues grew 24%, to $2.03 billion from $1.64 billion a year earlier. Its stock ended the Monday session at $207.22, making its total market capitalization about $53 billion. That is much less than the late 2021 stock high of $357 even with recent gains in investor confidence.
Coinbase went public in 2021 in a direct listing and has risen steadily in the finance ecosystem. Bitcoin recently reached $100,000, reaching close to its previous high point and rekindling crypto market enthusiasm.
Institutional Crypto demand elevates Coinbase status
Coinbase benefited from this inflow, with large institutions moving into the arena with regulated bitcoin exchange-traded fund approval. Analysts believe that the company has a more solid market presence, supported by substantial institutional participation in crypto trading.
In the meantime, S&P 500 additions tend to enjoy higher demand due to the updating of portfolios to replicate changes to the indices. Coinbase follows other recent technology additions, including Dell, Palantir, Super Micro Computer, and cybersecurity firm CrowdStrike.
In order to qualify for the S&P, Coinbase had to demonstrate profitability for the previous four quarters, which it has done. Besides domestic expansion, the exchange also intends to expand globally with the acquisition of Dubai-headquartered Deribit for about $2.9 billion. The acquisition is the biggest in the blockchain space and is set to expand Coinbase’s global presence.
Despite its entry into the S&P 500, Coinbase’s stock remains 17% lower year-to-date, lagging behind Bitcoin’s 10% gain. Investors continue monitoring the firm’s progress closely, especially as the crypto industry enters a new growth phase. Coinbase’s inclusion reflects growing mainstream acceptance of digital assets and their increasing role in global financial systems.
