Coinbase Global Inc., the largest U.S.-based cryptocurrency exchange, is set to join the S&P 500 Index in a historic milestone for the digital asset sector as crypto gains further legitimacy in traditional financial markets.
S&P Dow Jones Indices announced that Coinbase will replace Discover Financial Services in the benchmark index prior to the start of trading on May 19 following Discover’s merger with Capital One Financial Corp.
The inclusion propelled Coinbase shares up 13% in after-hours trading.
This development positions Coinbase as the first and only crypto-native company to be included in the S&P 500, reflecting a growing institutional recognition of blockchain-based financial infrastructure.
“This is a strong signal that digital assets are moving firmly into the financial mainstream,” said David Schassler, Head of Multi-Asset Solutions at VanEck. “It reflects a broader shift in how traditional markets are beginning to integrate crypto infrastructure.”
Coinbase’s market capitalisation has surged to approximately $53 billion, meeting the S&P 500’s minimum eligibility requirements, including a market cap threshold of $20.5 billion, along with profitability, liquidity and free-float benchmarks.
The company’s addition also aligns with broader shifts in index composition, as passive fund flows continue to dictate portfolio realignments globally.
The inclusion follows a turbulent yet resilient performance by Coinbase over the past two years. Despite regulatory scrutiny and market volatility — including fallout from the FTX collapse and declining sector trust — Coinbase stock has rallied more than 260% since 2023.
However, year-to-date, the company’s shares are down nearly 17%, reflecting pressure from weak Q1 earnings and slower trading activity despite an almost 10% gain in Bitcoin prices.
In Q1 2025, Coinbase reported a 24% year-on-year revenue increase, though net income fell 94% to $66 million. The decline was primarily attributed to the company marking its crypto holdings to market value.
Coinbase CEO Brian Armstrong called the S&P 500 inclusion a validation of what stakeholders in the crypto space “knew all along” — that crypto is here to stay.
“This milestone represents what the true believers, from retail investors to institutional investors to our employees and partners, knew all along,” Armstrong stated on X.
In a parallel announcement, Coinbase also disclosed its acquisition of Deribit, the world’s largest Bitcoin and Ether options exchange, in a $2.9 billion transaction.
The deal is considered one of the largest in crypto history and is expected to expand Coinbase’s footprint in derivatives markets, a segment that has gained momentum as institutional interest in crypto deepens.
The company’s growth also coincides with a more crypto-friendly policy environment under the current U.S. administration. Several enforcement actions by the Securities and Exchange Commission (SEC) have reportedly been dropped in recent weeks, signaling a shift in regulatory posture.
Market analysts suggest this shift has created a more conducive environment for mergers, listings, and capital expansion within the digital asset space.
“You’re seeing crypto-related SEC cases being dropped very rapidly. And so it’s a very conducive environment for these things,” said Dan Dolev, senior payments analyst at Mizuho. “There’s no sense of urgency to over-regulate when the administration appears committed to digital finance.”
The broader implications of Coinbase’s inclusion are significant. As index funds and ETFs tracking the S&P 500 adjust their portfolios to reflect the new composition, Coinbase could benefit from additional institutional inflows and heightened investor visibility.
While risks remain — including earnings volatility, evolving global regulation, and competition from decentralized platforms — Coinbase’s S&P 500 entry represents a major turning point in the integration of cryptocurrency into the global financial ecosystem.
