Coinbase Stock Jumps 24%. It's Joining the S&P 500 in Crypto Milestone. — Barrons.com

By Elsa Ohlen and Janet H. ChoThe cryptocurrency exchange Coinbase Global will join the benchmark S&P 500 index on May 19, marking an important milestone for the crypto sector.The news isn't entirely unexpected. Coinbase is one of the largest companies based on market value not currently part of the index. Still, shares soared 24% to $256.90 on Tuesday.Despite the jump, the stock is still down about 30% from $357.39, its highest closing level on record set in November 2021.Stocks added to the S&P 500 tend to go up as funds that track the index, such as SPDR S&P 500 ETF Trust, add the shares to their holdings.It is a "watershed moment" for both Coinbase and the crypto industry as a whole, Oppenheimer analysts led by Owen Lau said Tuesday. "Lack of deep institutional ownership was a bear thesis for COIN, but it has now become a strong tailwind," Lau said, raising his target for the stock price to $293 from $269.Coinbase's market cap stood at $52.78 billion as of Tuesday's close.The profile of cryptocurrencies and crypto-related companies has risen under expectations that the Trump administration will be more crypto-friendly than the Biden administration was.The price of digital coins has risen markedly since it became clear in November that President Donald Trump would return to the White House. The world's largest crypto, Bitcoin, is up roughly 50% since election day on Nov. 5.While increased demand for cryptos and ways to trade them, such as the Coinbase platform, could boost shares even further, the volatile prices of Bitcoin and altcoins could pose a risk.Coinbase will replace the online bank and credit-card company Discover Financial Services in the benchmark S&P 500 index, S&P Dow Jones Indices said in a press release late Monday. Discover is being acquired by Capital One Financial in a $35.3 billion all-stock bid that will create the nation's sixth largest bank. The deal is expected to close on May 18."Coinbase just became the first and only crypto company to join the S&P 500." Coinbase CEO Brian Armstrong wrote on the social-media platform X. "Crypto is here to stay."Robinhood, another online trading platform with a crypto trading offering, jumped 9% on Tuesday. MicroStrategy, the largest corporate holder of Bitcoin, finished 4.1% higher.Write to Elsa Ohlen at [email protected] and Janet H. Cho at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.