Coinbase, the largest US-based cryptocurrency exchange, is set to be included in the S&P 500 index effective May 19, 2025, replacing Discover Financial Services. This milestone underscores the growing institutional acceptance of crypto and signals a broader integration of digital assets into traditional financial portfolios. CEO Brian Armstrong emphasized that being part of the S&P 500 indicates that "crypto is here to stay" and anticipates that millions of Americans may indirectly invest in Coinbase via their retirement accounts that track the index.
Coinbase made headlines recently with its $2.9 billion acquisition of Deribit, a dominant global crypto derivatives exchange known primarily for Bitcoin and Ether options trading. The deal, expected to close by the end of the year, includes a combination of cash and Coinbase stock and is the largest acquisition in the crypto exchange industry to date. This strategic move strengthens Coinbase's position in the crypto derivatives market and diversifies its product offerings internationally.
Brian Armstrong revealed in an interview that Coinbase is actively exploring more mergers and acquisitions to expand its market presence, focusing on international markets and companies with similar business models. However, the company remains selective regarding opportunities. Armstrong remained noncommittal about acquiring stablecoin issuer Circle, although Coinbase already shares revenue with Circle and the latter has ongoing plans to go public.
On the financial front, Coinbase recently reported earnings per share of $1.94, beating expectations with a 7.6% year-over-year increase, though its 24% revenue growth to $2 billion slightly missed analyst estimates. Following these developments and the Deribit acquisition announcement, Coinbase's stock rose nearly 7% to $263.41, recovering from a yearly low of $143.
Market analysts foresee substantial institutional capital inflows into Coinbase, estimating passive index funds could contribute up to $16 billion. Oppenheimer increased its price target for COIN shares from $269 to $293, reflecting optimism about Coinbase's future growth and strategic initiatives.