Coinbase, a prominent cryptocurrency exchange, has been selected to join the S&P 500, replacing Discover Financial Services. This development highlights the company's increasing involvement in traditional financial structures.
Coinbase Joins the S&P 500
The change will take effect before the market opens on May 19. Following the announcement, Coinbase shares rose by 8% in pre-market trading. This decision comes amid Discover Financial Services being acquired by Capital One Financial.
Financial Performance of Coinbase
To enter the S&P 500, companies need to show profit in their most recent quarter and positive cumulative profit over the last four quarters. Coinbase reported a net income of $65.6 million, or 24 cents per share, down from $1.18 billion, or $4.40 per share, in the same quarter last year. Despite this sharp decline, revenue increased by 24%, reaching $2.03 billion.
Market Reaction to the Announcement
The market reacted positively to the news of Coinbase's entry into the index, with the S&P 500 rising 3.3% and crossing the 200-day moving average. Many stocks, including Tesla, Apple, and Nvidia, also saw gains. The entire Nasdaq index is now within 1% of turning positive for the year.
Coinbase's inclusion in the S&P 500 underscores its significance and growing influence in the traditional financial landscape. This event also reflects the broader acceptance of cryptocurrencies in the financial world.
