Coinbase (Coin) stocks skyrocketed more than 8% outside of business hours on S&P 500 Inclusion news. Coinbase will replace Discover Financial with valid indexes before the market that will be released on May 19th. This inclusion gives crypto companies an exposure to a wide range of investors/portfolios.
Stock in Cryptocurrency Exchange Coinbase (Coin) saw a massive surge in after-hours trading on Monday following the groundbreaking announcement that the company will be added to the prestigious S&P 500 Stock Index.
This inclusion marks a pivotal moment for Coinbase and the broader digital asset industry, increasing mainstream acceptance and potentially leading to a new wave of investor exposure.
Newcomers to Wall Street Premier Index
Coinbase is set to participate in the S&P 500, which tracks 500 of the largest publicly available US companies across diverse sectors, effective before the market opens on May 19th.
According to a press release from S&P, Coinbase replaces Index’s Discover Financial Services (DFS), as Discover is now being acquired by Capital One.
Currently trading on Nasdaq Exchange, Coinbase, with a market capitalization of nearly $53 billion, quickly rubs shoulders with Wall Street Titans like Apple, Microsoft, Amazon, Google and more within the S&P 500.
Cryptography acquires mainstream exposure
Including crypto-centric companies like Coinbase in such a widespread benchmark index is a critical development.
This means millions of everyday investors and numerous model portfolios and index tracking funds can directly touch the digital asset sector through their holdings.
The expected impact on trading volume is significant. “Coin that’s about to be in every portfolio in America,” commented Juan Leon, senior investment strategist at Bitwise, asset manager, in a post on X (formerly Twitter).
He predicted that “S&P 500 inclusion would force (The) stocks to seven times the daily trading volume.”
The pressing news of the S&P 500 inclusion sparked immediate investor excitement.
Coinbase’s shares reached $225 in post-market trading, a rise of 8.6%, based on the close to 4% profit achieved during Monday’s regular trading session.
Coinbase Journey and Eligibility
The milestone comes just three years after Coinbase’s public debut at NASDAQ in 2021, at which point it had a market capitalization of $52.788 billion.
The current stock price (ends Monday at $207.22) is below its peak in 2021 (over $357), but it is increasingly filling the gap between the crypto world and traditional finance, particularly with increasing institutional interest in digital assets.
Eligibility for the S&P 500 is strict, requiring companies to report profits in the most recent quarter and demonstrate cumulative profitability over the previous four quarters.
According to the CNBC report, Coinbase meets all of these criteria.
The company recently reported a profit of $65.6 million in its latest quarter. This is a significant drop from the reported profit of $1.18 billion year-on-year, but revenues showed healthy growth of around 24% year-on-year, reaching $2.03 billion.
Coinbase has been added to the S&P 500, already including a diverse technology company that goes beyond the large scale, following recent technology-related inclusions such as Dell, Palantir, Super Micro Computer and Crowdstrike, reflecting the evolving composition of the US economic landscape.
