Coinbase is set to become the first cryptocurrency company to be included in the prestigious S&P 500 index, marking a significant milestone for the crypto industry. S&P Dow Jones Indices announced on Monday evening that Coinbase will officially join the index on 19 May, replacing Discover Financial Services, which is being removed following its acquisition by Capital One Financial Corp.
“This marks the first time ever that a crypto company has joined the S&P 500,” said Coinbase CEO Brian Armstrong on X (formerly Twitter). “This milestone represents what true believers — from retail and institutional investors to our employees and partners — have always known: crypto is here to stay.”
Inclusion Despite Profit Drop
The historic inclusion comes despite a disappointing earnings report for the first quarter of 2025. While Coinbase saw a rise in revenue, both earnings and overall performance failed to meet market expectations. Net profit declined sharply compared to the previous quarter, underscoring the company’s recent financial challenges.
Nonetheless, Coinbase highlighted the progress made towards its 2025 strategic priorities. In a letter to shareholders released alongside its earnings report, the company stated: “This quarter, we made significant progress on our 2025 priorities: increasing revenue, enhancing user value, and laying the groundwork for growth in the next decade. We continue to gain market share in both global spot and derivatives trading.”
According to financial platform MarketWatch, inclusion in the S&P 500 depends on more than just market capitalisation. Profitability and the availability of freely traded shares also play a role. Coinbase’s addition to the index, despite underwhelming quarterly results, appears to reflect broader confidence in its long-term growth prospects.
Stock Surges Following Announcement
Following the announcement, Coinbase shares saw a sharp rise in value. In pre-market trading on Tuesday, the stock climbed as much as 9.03% to $225.94 on the NASDAQ. This followed a 3.96% increase during regular trading hours, where it closed at $207.22.
A spot in the S&P 500 is highly sought after, as it opens the door to a much wider pool of investors. In addition to passive index funds that track the S&P 500, actively managed funds are also compelled to adjust their holdings to reflect the updated index composition.
“Thanks to everyone who made it possible for a crypto company to be included in the S&P 500 for the first time in history,” read a post on Coinbase’s official X account.
Coinbase’s breakthrough highlights the growing legitimacy of the cryptocurrency industry within mainstream finance and signals increasing institutional interest in digital assets.
