Crypto took a huge step into the mainstream money world this week. Coinbase, the biggest U.S. crypto exchange, just got added to the S&P 500 index. This is a really big deal for cryptocurrency as a whole.
The S&P 500 tracks the 500 biggest public companies in America. When Coinbase joins this elite club on December 23, it becomes the first crypto company ever to make the list. This isn’t just good news for Coinbase – it’s a sign that digital money is becoming more accepted by traditional finance.
“This is like crypto getting a golden ticket to Wall Street’s biggest party,” says Alex Thorn from Galaxy Digital Research. “Being in the S&P 500 puts Coinbase in the same conversation as companies like Apple and Microsoft.”
Coinbase has had a rollercoaster journey to get here. The company went public in April 2021 when crypto prices were soaring. Then came the crypto winter of 2022, when prices crashed and Coinbase’s stock dropped over 80%. But 2023 brought a comeback, and now in 2024, Coinbase shares have jumped more than 70%.
The company’s market value recently hit $63 billion, making it bigger than old-school financial giants like CME Group. This growth helped Coinbase meet the strict rules needed to join the S&P 500.
Being added to the index means automatic investment from funds that track the S&P 500. These index funds manage trillions of dollars and must buy shares of every company in the index. This could bring billions of dollars flowing into Coinbase stock.
“When you join the S&P 500, you instantly get purchased by retirement accounts and pension funds across America,” explains Carol Alexander, finance professor at Sussex University. “Many people who never thought they’d invest in crypto will now have exposure through their retirement savings.”
This milestone comes as Bitcoin recently hit new all-time highs above $73,000. The approval of Bitcoin ETFs earlier this year already made it easier for regular investors to get involved with crypto. Now Coinbase’s addition to the S&P 500 takes things to another level.
Not everyone thinks cryptocurrency belongs in mainstream finance, though. Critics still point to concerns about energy use, market manipulation, and unclear regulations. Jamie Dimon, the boss of JPMorgan Chase, recently called Bitcoin a “pet rock” with no real value.
But supporters see Coinbase’s inclusion as proof that crypto is here to stay. “This isn’t just symbolic – it changes who can invest in the crypto economy,” says Alesia Haas, Coinbase’s Chief Financial Officer. “Institutions that were on the fence now have one less reason to stay away.”
For regular investors, this development might make cryptocurrency feel less risky and more normal. When something joins the S&P 500, it gets a stamp of approval that can change how people view it.
The crypto industry has been fighting for legitimacy since Bitcoin first appeared in 2009. From being dismissed as internet money for criminals, digital assets have slowly gained acceptance. Now with a crypto company joining America’s premier stock index, that journey takes another big step forward.
Coinbase replacing Etsy in the index also shows how the economy is changing. Traditional businesses are making room for digital finance companies. This shift mirrors broader changes happening as technology transforms how we think about and use money.
What comes next for Coinbase and crypto? The company still faces challenges like regulatory uncertainty and competition from other exchanges. But joining the S&P 500 gives Coinbase extra credibility that could help it navigate these issues.
For the crypto world as a whole, this milestone opens doors. More institutional investors might consider digital assets now that they have indirect exposure through index funds. And other crypto companies may find it easier to work with traditional financial partners.
The journey from internet experiment to mainstream financial asset has been a long one for cryptocurrency. Coinbase joining the S&P 500 doesn’t end that journey, but it marks an important checkpoint along the way.
