Coinbase, the largest U.S. crypto exchange, officially joins the S&P 500, replacing Discover Financial Services (DFS) after its acquisition by Capital One (COF). This inclusion marks a significant moment for crypto, signaling mainstream legitimacy.

With a market cap of $67 billion and shares up almost 30% since the announcement, Coinbase’s entry brings more than just prestige. Passive index funds and active managers tracking the S&P will be compelled to purchase Coinbase stock, driving demand and enhancing visibility. This means investors with 401(k)s or mutual funds are now likely exposed to crypto, regardless of their initial intentions.

Meryem Habibi, chief revenue officer at Bitpace, notes that this inclusion reflects broader institutional acceptance of crypto as a lasting part of global finance, not just a recognition of Coinbase’s market capitalization or financial performance.

Coinbase, originally a retail crypto trading platform, has transformed into an infrastructure company serving institutions and developers. This pivot has enabled it to withstand regulatory challenges and crypto market downturns. Its S&P inclusion demonstrates that Wall Street now views Coinbase as an integral part of the financial system, meeting strict profitability, liquidity, and governance standards.

Despite the risks associated with the volatile crypto sector, analysts suggest the inclusion reflects market structure more than guaranteed long-term dominance.

Habibi emphasizes that this event sets a precedent: crypto-native companies can evolve into systemically relevant financial entities. Rather than indicating the downfall of traditional finance (TradFi), it underscores a convergence where digital infrastructure is being integrated into the mainstream financial framework. Similar to how fintech companies became embedded within the banking system, crypto firms like Coinbase are reshaping the core of capital markets.