Coinbase Global Inc. (NASDAQ: COIN) is officially entering the S&P 500 effective May 19. It will substitute Discover Financial Services (NYSE: DFS), which is being purchased by Capital One Financial (NYSE: COF), a current participant in the index.
This is a significant step for Coinbase and an even more substantial indication for Bitcoin. The addition of a cryptocurrency firm to one of the most critical indexes within the U.S. illustrates the progress this sector has made. It’s not merely speculation anymore—it’s evolving into a genuine component of the conventional financial framework.
“A heartfelt thank you to all who made it possible for a crypto enterprise to join the S&P 500 for the first time in history,” Coinbase announced on their X account.
To qualify for the S&P 500, a corporation must fulfill several stringent criteria. They require a market capitalization of at least $18 billion, a majority of their shares held by the public, profitability across the last four quarters, and listing on a U.S. exchange. Coinbase meets all these requirements, boasting a market cap exceeding $40 billion and robust recent profits.
Once Coinbase is inducted, every fund that tracks the S&P 500 will be obligated to include it in their investment allocations. This implies heightened demand for the stock, which may increase its price in the short term. More importantly, it enhances visibility and legitimacy for the entire cryptocurrency sector.
“Congratulations Brian Armstrong on $COIN being included in the S&P 500 Index,” commented Strategy Executive Chairman Michael Saylor. “A significant milestone for Coinbase and for Bitcoin.”
Next, let’s discuss Bitcoin. Coinbase is among the leading platforms individuals utilize to buy and sell Bitcoin. Its inclusion in the S&P 500 renders Bitcoin exposure more attainable for conventional investors. Additionally, it helps to dispel the notion that Bitcoin and cryptocurrency are merely precarious bets.
The figures speak volumes. Over the last 14 years, Bitcoin has significantly outperformed the S&P 500 and gold. Since 2010, Bitcoin has skyrocketed by an extraordinary 7,200,000%, contrasted with the S&P 500’s 306% and gold’s 116%. Even when examining shorter periods, Bitcoin consistently surpasses both. For example, in the past year, Bitcoin has risen by 27%, while gold increased by 37%, and the S&P 500 has only grown by 5%. In the previous five years, Bitcoin has surged by 1,138%, far exceeding gold’s 85% and the S&P 500’s 92%.
