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Coinbase, the largest U.S. crypto exchange, officially joins the S&P 500 today (May 19), replacing Discover Financial Services (DFS) following its acquisition by Capital One (COF). The move marks a major moment of mainstream legitimacy for crypto, which until recently prided itself on being an alternative to the financial system.
Now? It’s embedded in it
With a market cap of $67 billion and shares up almost 30% since the announcement (although news of a hack has also broken since), Coinbase’s inclusion brings more than bragging rights. Passive index funds that track the S&P — and active managers who take it as their benchmark — will be forced to buy Coinbase stock, creating demand and cementing visibility. For investors with 401(k)s or mutual funds, that means you likely now hold crypto exposure, whether you ever meant to or not.
“This isn’t merely a nod to Coinbase’s market capitalisation or financial performance,” said Meryem Habibi, chief revenue officer at Bitpace. “It reflects a broader institutional acceptance of crypto as an enduring component of global finance.”
Founded as a retail crypto trading platform, Coinbase has evolved into an infrastructure company that also serves institutions and developers — a pivot that has helped it survive regulatory crackdowns and crypto’s brutal winters. Its S&P inclusion follows strict profitability, liquidity, and governance standards, underscoring that even Wall Street’s most staid types now see Coinbase as part of the system.
Risks, of course, remain. Coinbase still relies heavily on trading volumes in a volatile sector, and analysts caution that the inclusion says more about market structure than long-term dominance.
A cultural shift that can’t be ignored
“The event sets a new precedent: Crypto-native companies can evolve into systemically relevant financial entities,” Habibi elaborated. “Rather than signalling the demise of TradFi, it highlights a convergence, where digital-native infrastructure is being woven into the mainstream financial fabric. Just as fintechs were once disruptors and are now embedded within the banking ecosystem, crypto firms like Coinbase are reshaping the core of capital markets.”