Coinbase's (COIN, Financial) stock price soared more than 20% after being added to the S&P 500 index. This marks one of the most significant rebounds since the day after Donald Trump's presidential election victory. S&P Global announced that Coinbase would replace Discover Financial Services, which is being acquired by Capital One Financial Corporation. This change will take effect before the start of trading on Monday.
Inclusion in the S&P 500 typically boosts a stock's value as funds tracking the index incorporate it into their portfolios. This development comes after a turbulent period for Coinbase, marking a substantial shift since Trump's election. The company's stock had previously jumped 31% due to optimism about crypto-friendly policies from the incoming administration.
Coinbase and its CEO, Brian Armstrong, are significant financial backers of pro-crypto candidates, contributing over $75 million to a political action committee and its affiliates. Armstrong personally donated over $1.3 million to various candidates.
Despite favorable conditions during Trump's tenure, legislative progress for the crypto industry has stalled. Coinbase's stock experienced volatility, dropping sharply in February and March due to market disruptions. However, the stock is up approximately 2% year-to-date.
Since its direct listing in 2021, Coinbase has become a key player in the U.S. financial system, especially with the approval of Bitcoin spot ETFs. Bitcoin prices recently surged past $104,000.
Last week, Coinbase reported net income of $65.6 million, or $0.24 per share, with revenue rising 24% to $2.03 billion. The company also announced a $2.9 billion acquisition of Deribit, a major crypto derivatives exchange in Dubai, marking the industry's largest deal to date and expanding Coinbase's international reach.
