Coinbase, the largest U.S.-based cryptocurrency exchange, will officially join the S&P 500 index on May 19, making history as the first crypto-native company to earn a spot in the prestigious benchmark. The announcement, first reported by CNBC, marks a pivotal moment for the digital asset sector, reinforcing cryptocurrency’s growing influence in traditional financial markets.
The San Francisco-based exchange will replace Discover Financial Services, which is currently undergoing acquisition by Capital One. Following the news, Coinbase shares surged 8% in after-hours trading, reflecting increased investor confidence in the company’s future as it gains recognition from Wall Street’s most closely watched index.
Crypto’s Rise in Institutional Circles
Coinbase’s inclusion in the S&P 500 highlights the increasing institutional acceptance of cryptocurrency, particularly amid the recent approval of Bitcoin exchange-traded funds (ETFs). The move also coincides with rising investor interest—both institutional and retail—in crypto-related assets.
Since going public in 2021 through a high-profile direct listing, Coinbase has sought to solidify its position within the U.S. financial system. While its share price has yet to reclaim the highs of its IPO year, the company’s broader trajectory reflects growing legitimacy for digital assets. On Monday, Coinbase closed at $207.22 per share—down from its 2021 peak of over $357—but still boasting a robust market capitalization of $53 billion.
To qualify for inclusion in the S&P 500, companies must demonstrate profitability in their most recent quarter and report cumulative earnings over the past year—criteria Coinbase met after a notable financial performance in early 2024.
Financial Performance and Market Response
For the first quarter of this year, Coinbase posted net income of $65.6 million, or 24 cents per share. That’s a far cry from the same quarter a year ago, when net income reached $1.18 billion, or $4.40 per share, during a much stronger bull market for crypto. However, when adjusted for cryptocurrency investment fluctuations, Coinbase reported a healthy $527 million in profit, or $1.94 per share.
The company’s revenue grew 24% year over year to $2.03 billion, though it fell just short of Wall Street’s forecast of $2.12 billion. A large portion of this income—$1.26 billion—came from transaction fees, while subscription and services revenue accounted for $698 million.
Despite this growth, some metrics showed signs of market cooling. Consumer trading volume fell 17% from the previous quarter to $78.1 billion, while institutional volume dropped 9% to $315 billion. These declines follow a late-2023 spike in activity that many attributed to the return of Donald Trump to the political spotlight—an event viewed by some as a tailwind for crypto due to Trump’s perceived market-friendly stance.
Strategic Expansion and Global Ambitions
Coinbase continues to push for greater global reach. Just last week, the company announced a $2.9 billion acquisition of Deribit, a Dubai-based cryptocurrency derivatives exchange. The deal is one of the largest in the industry’s history and signals Coinbase’s ambitions to diversify its revenue sources and strengthen its position in the growing global derivatives market.
The company is also projecting continued momentum. For the second quarter, Coinbase expects subscription and service revenue to range between $600 million and $680 million. However, it has cautioned that income from stablecoins may decline slightly, while blockchain rewards could drop due to falling token prices.
Despite its S&P 500 inclusion and overseas expansion, Coinbase stock is still down 17% for the year—lagging behind Bitcoin, which has risen around 10% over the same period. Yet, analysts suggest that listing in the index could help reverse that trend, as S&P-tracking funds will now be required to buy into the stock, potentially driving demand.
A Symbolic Leap for the Crypto Industry
CFO Alesia Haas described the milestone as a significant achievement for both Coinbase and the broader crypto ecosystem. “Joining this prestigious index reflects how far Coinbase and the industry have come and is a signal of where the world is heading,” Haas said.
With its S&P 500 entry, Coinbase joins other prominent Bitcoin-holding companies already in the index, such as Tesla and Block Inc. It also enters the ranks of recent tech-forward additions like Dell, Palantir, Super Micro Computer, and CrowdStrike.
As cryptocurrency moves further into the mainstream, Coinbase’s ascent may be remembered as a turning point—both for the company and for the evolution of digital finance in the public markets.
