Coinbase, one of the world's most prominent cryptocurrency exchanges, has made history by joining the S&P 500, one of the world's most elite stock indexes. This milestone achievement not only marks a triumph for Coinbase but also signals the growing legitimacy and mainstream acceptance of the crypto industry.
"This is more than an achievement for Coinbase; it's a landmark for the broader crypto and blockchain industry," said Meryem Habibi, chief revenue officer of Bitpace. "Coinbase joining the S&P 500 doesn't just boost the owner of the largest US cryptocurrency exchange. It cements the legitimacy of an entire asset class."
According to Jason Kennard, head of business development at ARK Invest Europe, this is a significant event that marks the first time a crypto-native firm has met the stringent profitability, liquidity, and market cap requirements of "the most iconic benchmark index" in global markets. It is a milestone event that brings with it indirect adoption by institutional investors, retirement plans, and sovereign funds.
Stephen Sosnick, chief strategist at Interactive Brokers, added: "Whether they want it or not, or know it or not, equity investors who buy S&P 500 index funds will now have crypto exposure via COIN." Indeed, Coinbase's inclusion in the index could result in billions of dollars in passive investor flows just from becoming part of the S&P 500.
Regulatory clarity is still emerging, but institutional rails are being laid fast. Crypto companies can tap markets as a source of liquidity, but that doesn't necessarily involve a convergence of financial channels," said Sosnick. "Convergence will occur when a traditional finance company truly adopts crypto as a means of payment."
On the other hand, Habibi pointed to examples like JPMorgan's Onyx platform, Nasdaq's digital asset custody infrastructure launch, and PayPal's launch of its PayPal USD (PYUSD) stablecoin, which integrate crypto rails and consumer fintech. These solutions underscore a shift in which crypto and TradFi are no longer competing but co-evolving.
"Crypto-native firms are beginning to resemble traditional financial institutions in structure, while banks are adopting decentralized technologies to improve efficiency, reduce settlement friction, and expand asset reach," Habibi explained.
Now that Coinbase has broken ground, should one expect other crypto firms to gain S&P 500 inclusion soon? Maybe not. A large market capitalization is needed to join the S&P 500, but that alone is not sufficient. There are other criteria, such as being profitable in the most recent year and quarter to qualify.
"Galaxy Digital is newly listed on Nasdaq, but it still needs consistent profitability," said Kennard. "Marathon Digital, Riot Platforms, and Strategy are often cited but may be a little early in their journey." It's unclear when or if other crypto-native companies will join the S&P 500.