Coinbase, the leading cryptocurrency exchange, just hit $100 billion corporate valuation. The news comes the same day that the company was announced to be replacing Discover Financial Services in the S&P 500 index. This amendment will go into effect the morning of May 19, before their trading opens. This move is a major milestone for Coinbase. The company’s public listing in 2021 was followed by a meteoric rise as the company cemented its place in the U.S. financial system.
Last week Coinbase announced a blowout quarter, with $65.6 million in net income, or 24 cents per share. That represents a 35 percent drop from last year’s net income of $1.18 billion, or $4.40 a share. It does shine a light on the company’s continued efforts to make moves in a highly volatile market. Notably, Coinbase’s revenue rose by 24% to $2.03 billion, up from $1.64 billion a year ago, reflecting the company’s resilience and growth potential.
The market reacted almost instantly, sending shares of Coinbase up 8% in after-hours trading. After all, at one point Coinbase’s stock was trading at more than $357, the height of investor enthusiasm even with earnings swinging back and forth. Coinbase’s investment in crypto paid off and was a huge windfall to their bottom line revenue. This feature has been the main driver in the company’s financial success.
The transition to the S&P 500 occurs as the financial sector is undergoing drastic changes. Discover Financial Services, which is in the process of being acquired by Capital One Financial. That has left a gaping void which Coinbase is clearly eager to seize. This shift is monumental, underscoring the growing credibility and acceptance of cryptocurrency platforms in traditional financial markets.
Coinbase is officially a member of the S&P 500! Most notably and excitingly, the company plans to merge with Deribit, the world’s largest crypto derivatives exchange (that will soon be headquartered in Dubai). This strategic investment is worth $2.9 billion. It’s indicative of Coinbase’s ambition to grow its global footprint and enrich its product portfolio even further in the highly competitive cryptocurrency market.
Bitcoin’s incredible bull run since Coinbase’s direct listing in 2021, with significant institutional adoption, has contributed to the growing interest. Earlier this year, large asset managers received the green light from regulators to launch spot Bitcoin exchange-traded funds. This step continues to legitimize the overall cryptocurrency sector and Coinbase’s position within it.