Coinbase Global Inc. experienced a significant boost in its stock (COIN) price on Tuesday, with shares soaring 24%, marking the company’s sharpest rally since the day after Donald Trump’s election victory, on the heels of the exchange’s announcement that it will be included in the S&P 500, a key benchmark for US stocks.
Coinbase Shares Rally Following S&P 500 Inclusion
S&P Global confirmed late Monday that Coinbase will replace Discover Financial Services, which is currently undergoing acquisition by Capital One Financial. This change is set to take effect before trading begins on Monday.
This latest rise in Coinbase’s stock reflects a dynamic few months for the cryptocurrency exchange, especially following Trump’s return to political prominence.
The company saw a similar spike of 31% on November 6, 2016, when Trump was elected, driven by optimism that his administration would adopt more favorable policies toward the crypto industry.
Coinbase and its CEO, Brian Armstrong, have been prominent financial backers in the 2024 election cycle, supporting pro-crypto candidates across various levels.
The company was among the top corporate donors, contributing over $75 million to a political action committee (PAC) called Fairshake, while Armstrong personally donated more than $1.3 million to multiple candidates.
COIN Recovers 3.5% Gains
While early developments in Trump’s administration seemed promising for the crypto sector—characterized by deregulation and an executive order aimed at establishing a strategic Bitcoin reserve—legislative progress has been sluggish.
This stagnation is partly attributed to concerns about Trump’s personal financial interests in crypto ventures, including a meme coin initiative involving his family.
Coinbase itself has faced significant fluctuations in its stock value, having plummeted 26% in February and 20% in March amid market volatility driven by Trump’s tariff announcements. However, with Tuesday’s rally, the stock is now up approximately 3.5% for the year, trading at approximately $256.90.
Expanding Global Footprint
Since going public via a direct listing in 2021, Coinbase has solidified its role within the US financial system, coinciding with a surge in Bitcoin prices and the approval of major institutions to create spot Bitcoin exchange-traded funds (ETFs).
To qualify for inclusion in the S&P 500, a company must report a profit in its most recent quarter and have cumulative profitability over the last four quarters.
The crypto exchange recently reported a net income of $65.6 million, or 24 cents per share, down from $1.18 billion, or $4.40 per share, a year earlier, largely due to adjustments in the fair value of its crypto investments. Revenue, however, rose by 24% to $2.03 billion from $1.64 billion year-over-year.
Additionally, Coinbase announced plans to acquire Dubai-based Deribit, a leading crypto derivatives exchange, for $2.9 billion, marking the largest deal in the crypto industry to date.
Featured image from DALL-E, chart from TradingView.com