Coinbase shares saw a significant increase in pre-market trading on Tuesday, following the announcement that the company will become the first cryptocurrency firm to be included in the S&P 500 index.
In this transition, Coinbase will take the place of Discover Financial Services, which is set to be acquired by Capital One later this month. The news propelled Coinbase’s stock price up by 10%, indicating that funds tracking the S&P 500 will likely incorporate its shares into their portfolios.
Since its public debut in 2021, Coinbase has experienced considerable volatility, and its stock performance this year reflects the broader fluctuations of the cryptocurrency market. Although the company is strategically positioned to benefit from the current administration’s favorable stance on cryptocurrencies, it recently reported disappointing first-quarter earnings, showing a decline in profits.
In a noteworthy development, Coinbase announced last week that it has reached an agreement to acquire the crypto options exchange Deribit for $2.9 billion.