Shares of Coinbase (COIN) surged over 8% in after-hours trading following the announcement that the prominent U.S. cryptocurrency exchange will be added to the S&P 500 index starting May 19. Coinbase will replace Discover Financial Services (DFS) in the index after Capital One completes its acquisition of DFS.
COIN shares, trading on Nasdaq, closed at $207.22 before leaping to $225 after the news broke, capping a total gain of nearly 12% for the day. The company maintains a $53 billion market capitalization and is recognized as the largest crypto exchange in the U.S., handling trading and custody of digital assets like Bitcoin and acting as custodian for crypto ETF issuers BlackRock and Fidelity.
Coinbase achieved inclusion after reporting profits for the latest and prior four quarters, a requirement for S&P 500 entry, despite Q1 revenue slipping 10% due to lower trading activity. The company recently disclosed the $2.9 billion acquisition of digital asset options exchange Deribit, further underlining its growth in the sector.
The inclusion aligns Coinbase with major U.S. public companies such as Apple, Microsoft, Amazon, and Google, making its stock accessible to a broader investor base, especially those tracking the index. This move is expected to elevate Coinbase's visibility in traditional financial markets.