Coinbase to become the first crypto firm to join the S&P 500

Crypto exchange Coinbase will soon be indirectly added to millions of investment portfolios as it is set to join the S&P 500 index on May 19.

Crypto exchange Coinbase Global (COIN) is set to join the Standard and Poor’s 500 (S&P 500) on May 19, becoming the first and currently only crypto firm to make it into the index.

The crypto exchange will replace Discover Financial Services (DFS), which was recently acquired by Capital One Financial Corp (COF), S&P Global said on May 12.

The S&P 500 is a stock market index that tracks the performance of 500 of the largest, publicly traded companies in the US, representing a broad measure of the overall US stock market.

Coinbase’s inclusion in the S&P 500 should increase demand for its stock because index funds and exchange-traded funds that track the S&P 500 must buy COIN shares to mirror the index.

The S&P 500 tracked an aggregate market cap of $49.8 trillion as of March 31. It is a market-cap-weighted index, giving more weight to larger firms such as Microsoft, Apple, and Nvidia. The bottom 400 companies, where Coinbase will likely be, are typically weighted between 0.01% and 0.2% of the overall index.

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