Shot Through the Roof: Coinbase's Stock Soars with S&P 500 Inclusion
Cryptocurrency exchange giant Coinbase's shares surge following official announcement of joining S&P 500 index.
Coinbase (COIN) is on cloud nine after it secured a spot on the S&P 500 index, beginning from May 19. The crypto exchange's shares skyrocketed, soaring 8% in after-hours trading!
Post the epic announcement, COIN's shares touched an after-hours dollar value of $225 each. But that's not all—even before the announcement, the stock had been on a steady rise, managing a near 4% increase during regular trading hours to reach $207.22.
Discover Financial Services (DFS) is unlucky this time as Coinbase takes its place in the S&P 500, with Capital One finalizing its takeover of Discover soon.
Coinbase, America's top crypto exchange, allows customers to dabble in buying, selling, and betting on multiple digital assets. In a recent report, the company noted that its total revenues fell by 10% quarter-over-quarter, missing analyst predictions in Q1 earnings. However, despite the decline, Coinbase managed to record a profit for the quarter, which is essential as the S&P 500 only admits companies that have been profitable in the latest quarter and the four preceding ones.
The California-based crypto giant went public in 2021 and has a contract with the U.S. Marshals Service to handle and dispose of seized digital assets such as Bitcoin. To top it off, Coinbase custodies Bitcoin for crypto ETF products launched by titans of the asset management world—BlackRock and Fidelity.
A Giant Leap for Crypto:why it Matters
Coinbase's induction into the S&P 500 represents a game-changing moment for the crypto sector, signifying growing acceptance and mainstream acknowledgment of digital currencies. It's the first crypto-focused company to make it into this prestigious index, marking a big leap for the crypto world as it moves closer to traditional finance.
Immediate Response and Future Prospects
- Stock Market Stir: The stock surge of over 25% following the announcement reflects heightened optimism and speculation of further investment inflows.
- Index Funds and ETFs: Being part of the S&P 500 means index funds and ETFs that follow this index will need to buy Coinbase shares, resulting in potential stock price hikes. Experts predict up to $16 billion in inflows could ensue.
Looking to the Future
- Boosted Credibility: The S&P 500 nod enhances Coinbase's credibility, potentially attracting more investors and forging new partnerships.
- Expanded Market Reach: Coinbase's visibility is boosted, magnetizing additional investors, both active and passive, solidifying its role in the crypto space.
- Long-haul Prospects: Expectant capital inflows and an increased market presence could drive sustained long-term growth for Coinbase, despite uncertainty over market volatility and crypto regulations.
- The inclusion of Coinbase in the S&P 500 has sparked a significant increase in the crypto exchange's stock, with shares soaring 8% in after-hours trading and touching an after-hours dollar value of $225 each.
- As a result of its S&P 500 listing, Coinbase, a leader in the crypto industry, may experience increased investment inflows from index funds and ETFs that follow the index, potentially leading to further stock price hikes.
- The S&P 500's recognition of Coinbase signifies a pivotal moment in the crypto sector, symbolizing growing acceptance and mainstream recognition of digital currencies.
- Coinbase's entry into the S&P 500 marks a significant milestone for the crypto world, as it becomes the first crypto-focused company to secure a spot in this prestigious index.
- The enhanced credibility that comes with Coinbase's S&P 500 acceptance could attract more investors and forge new partnerships, potentially solidifying the company's role in the crypto space and driving sustained long-term growth.
