Coinbase, the cryptocurrency exchange that went public through a direct listing in 2021, will officially join the S&P 500 index, replacing Discover Financial Services. This new address seems like a huge achievement for Coinbase. It reinforces the company’s position—as evidenced by this settlement—as a vital player in the U.S. financial system. We expect the amendment to be effective prior to the opening of trading on May 19, 2023.
Founded by Brian Armstrong, Coinbase has experienced explosive growth in the last year. Just last week its stock hit a closing share price high of just above $357, signaling growing investor optimism about the potential of its platform. Bitcoin prices briefly broke over the $100,000 mark. In response to the news, shares of Coinbase surged 8% in after-hours trading. This landmark news proves that cryptocurrencies have become a significant interest and Coinbase’s role in this developing market.
Coinbase recently published Q2 2022 earnings. It reflects an incredible 24% jump in their revenues, up to $2.03 billion from $1.64 billion last year. The company cut its full-year guidance after the company’s net income tanked 58%. It dropped to $65.6 million, or 24 cents per share, from $1.18 billion, or $4.40 per share, the prior year. Despite this blow, Coinbase’s longer-term path shows that they have a solid business model with or without crypto excitement.
The upcoming Capital One Financial acquisition of Discover Financial Services helped pave the way for Coinbase’s debut on the S&P 500. This tactical acquisition increases Coinbase’s market visibility and comports with their future global expansion ambitions. Just last week Coinbase announced it’s going to acquire Dubai-based Deribit, a top crypto derivatives exchange with a $2.9 billion valuation. This merger would be notable as the largest acquisition in the entire crypto space to date. It tries to extend Coinbase’s reach outside of U.S. borders …
Coinbase’s addition to the S&P 500 is a signal of something bigger happening: crypto is becoming ever more accepted and integrated into traditional finance. As this sector continues to mature, companies like Coinbase are poised to play pivotal roles in shaping the future of digital assets and their integration into traditional financial systems.
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