The Crypto Exchange Coinbase (COIN) climbs 16% early Tuesday after the announcement of Monday night of its integration with S&P 500.
The coin will be added to the S&P 500 index after near Friday, replacing the Discover Financial Services (DFS) obtained by the Capital One (COF).
Wall Street Brokerage Bernstein estimates that the transfer can lead to nearly $ 16 billion of pressure purchase for Coinbase – around $ 9 billion from passive funds linked to S&P 500 and $ 7 billion from active allocations.
Coinbase is the “first and only Crypto company joining the S&P 500,” written by analysts led by Gautam Chhugani.
Chhugani has a Coinbase sharing outperform rating with a $ 310 price target, or about another 30% upside down from the current $ 240.
The KBW Investment Bank estimates that S&P 500 funds will have to buy 36 million Coinbase shares for index integration, which is about 4 days of average purchase volume.
The KBW further noted that on April 30, 9.9 million shares of Coinbase was held short, 1.4 days to cover.
“Since 2017, the financial 500 has been increasing 5.2% on the day after the announcement,” KBW said, and Coinbase’s addition could provide way for other crypto companies to join the index.
Read more: Coinbase’s sharing jumps 8% with S&P 500 integration
