The news of Coinbase joining the index caused an 8% surge in its stock price. Having gone public via direct listing in 2021, Coinbase has gradually become a key player in the U.S. financial system. The rising value of Bitcoin and the approval of spot Bitcoin ETFs for institutional investors have accelerated this process.

Last week, Bitcoin surpassed the $100,000 mark, nearing the peak it reached back in January. However, Coinbase shares are still trading well below their all-time high from the end of 2021. On Monday, the company’s stock closed at $207.22, giving it a market cap of $53 billion. At its peak, Coinbase stock had traded above $357.

Will Coinbase’s Addition to the S&P 500 Boost Its Stock?

Companies added to large indices like the S&P 500 typically see their shares rise, as funds tracking the index incorporate these new stocks into their portfolios.

The index, which is heavily tech-weighted, has recently added several companies from across the sector. Last year, artificial intelligence server manufacturer Super Micro Computer, cybersecurity firm CrowdStrike, defense software provider Palantir, and Dell were all included in the index.

To be included in the S&P 500, companies must report a profit in the most recent quarter and maintain positive cumulative earnings over the past four quarters. Coinbase announced last week that it earned a net income of $65.6 million, equivalent to $0.24 per share. During the same period last year, the company had posted a profit of $1.18 billion. Its revenue increased 24% year-over-year, reaching $2.03 billion.

Additionally, Coinbase made a major acquisition last week. The company announced it will acquire Dubai-based crypto derivatives exchange Deribit for $2.9 billion. This deal stands out as the largest acquisition in the crypto industry to date, and it aims to expand Coinbase’s reach outside the United States.

Despite recent positive developments, Coinbase shares are down 17% since the beginning of the year. In contrast, Bitcoin has gained around 10% in the same period.

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