Market Watch

Coinbase Shares Jump on Addition to S&P 500 Index in Watershed for Crypto Market

Coinbase Global (COIN) shares jumped nearly 15% on Tuesday after the cryptocy exchange became the first digital asset player to be included in the benchmark S&P 500 index (SPY500). It will replace credit card issuer Discover Financial, which is being acquired by Capital One. The move will be effective before trading begins on May 19. The move marks a major milestone for a sector that was once restricted to the fringes of the financial world.

“It is a watershed moment for Coinbase and the industry. It sets an example for other crypto companies to go public and earn a seat in the S&P 500,” Oppenheimer analyst Owen Lau said. With surging institutional interest, crypto has rapidly moved into the mainstream, especially after President Donald Trump promised a lighter regulatory touch.

“We believe S&P 500 inclusion will benefit Coinbase for a while as institutional investors take time to prepare to get into the stock,” Oppenheimer analysts noted after raising price target to $293. In early trade, the stock hit its highest in nearly three months, adding more than $8 billion to the market value of the cryptocy exchange. The inclusion could also boost demand for Coinbase shares, as funds tracking the benchmark index would need to add the company to their portfolios. Last week, Coinbase reported a drop in first-quarter profit. However, analysts have said that a recovering market could boost its momentum.
The company has been active in expanding its institutional investor base and has also taken steps to get a foothold in non-U.S. markets, strengthening its position as the largest publicly traded cryptocy exchange in the world. It said last week it would buy derivatives exchange Deribit in a $2.9 billion deal to expand into the crypto options markets. “Substantial dry powder positions Coinbase very well to acquire another leader in this space if opportunities arise,” Oppenheimer analysts said, while betting on a potential acquisition of a prediction market such as Polymarket.
Terron Gold

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