Coinbase rockets 15% after joining S&P 500

Coinbase shares surged after being added to the S&P 500, a historic move for the crypto industry.

Coinbase stock jumped nearly 15% on Tuesday after it was announced that the crypto exchange will join the S&P 500 index, replacing Discover Financial, which is being acquired by Capital One. The change will take effect before markets open on May 19.

This marks a major achievement for the crypto sector, once viewed as an outsider in traditional finance. Analysts from Oppenheimer called it a "watershed moment", saying it could inspire more crypto companies to go public and aim for similar milestones.

Institutional interest in crypto has been growing, particularly with former President Donald Trump signaling a friendlier stance on crypto regulation. Oppenheimer raised its Coinbase price target to $293, believing S&P inclusion will attract long-term institutional investment.

The stock reached a three-month high, adding over $8 billion to Coinbase’s market cap. Inclusion in the S&P 500 is expected to drive more demand as funds tracking the index adjust their holdings.

Despite a dip in first-quarter profit, analysts see potential for a rebound as the crypto market improves. Coinbase continues to grow its reach among institutional investors and internationally. Last week, it agreed to buy crypto options exchange Deribit for $2.9 billion, aiming to expand in derivatives. Analysts believe Coinbase still has the capital to make more major acquisitions, possibly targeting platforms like Polymarket.