“First they fight you, then they recognize you”:
Coinbase joins the S&P 500 index
Coinbase announced that it will become the first digital asset company to officially
join the S&P 500 index, representing a pivotal moment in the relationship
between the traditional sector and emerging markets for cryptocurrencies.
According to :
an analysis by “bernstein”, the move could lead to potential investment inflows of
up to $9 billion, with index-linked funds allocating new stakes to the “COIN” stock.
In a note to clients, analysts led by “Gautam Chogani”
commented :
First they fight you
then they add you to the S&P 500.
In reference to the radical shift in the position of markets
and institutions towards
Coinbase :
which fought a lengthy legal dispute with the US Securities
and Exchange Commission before the equation turned in its favor.
Coinbase's current :
market value is approximately $52 billion
- equivalent to 0.1% of the total S&P 500 index
- which is estimated at approximately $52 trillion
- and represents approximately 0.7% of
the financial sector allocations within the index.
It is estimated that :
ETFs and non-ETFs tracking the S&P 500 may have to buy up
to $7–9 billion worth of Coinbase shares to reflect the new weight within the index.
“Matthew Siegel”
head of digital assets research at “VanEck”, supported this analysis, noting that
the S&P 500 represents Bitcoin for stock indices
in terms of institutional trust and reliance.
He added that
- funds that track the index, with a total value of about $5 trillion
- may pump more than $10 billion into the stock
- assuming an approximate weight of 0.2%.
Despite some concerns about increased competition and declining trading fees
“Bernstein” analysts stressed that Coinbase is in a strong position within a
regulatory environment that favors regulated players, in light of the shift of
cryptocurrency markets towards repositioning within the United States.
Coinbase
which floated in April 2021 through a direct listing on the Nasdaq Stock Exchange
is currently the largest US cryptocurrency trading platform with an estimated
market share of 66%, assets exceeding $400 billion
and an active user base of approximately 10 million.
With the ambitions of
the “Trump” administration to transform the United States into the crypto capital
of the world, through clear legislation for stablecoins, a regulatory structure for
digital markets, and bank support for crypto assets
Coinbase :
continues to establish itself as a key focus in this transformation.