Last week, Coinbase joined the S&P 500, one of the most selective people in the stock index – a victory for the Crypto firm, spent most of the 2020s fighting US government agencies such as the SEC and Commodity Futures Trading Commission for its safety.
But this acquisition is not about just one company.
“It’s more than a success for Coinbase; it’s a sign for the broader crypto and blockchain industry,” said Meryem Habibi, Bitpace’s chief income official. The Coinbase to join the S&P 500 has not only strengthened the owner of the largest US cryptocurrency exchange. “It provides the legitimacy of an entire class of possession,” he told the cointelegraph.
Jason Kennard, head of business development in Ark Invest Europe, told the Cointelegraph that for the first time, a crypto-kick-fashion company achieved the strict profitability, liquidity and market cap requirements of “the most iconic benchmark index” in global markets, increasing: addition:
It sends a strong signal to institutional investors: crypto infrastructure grows in a conviction, systematic part of the financial ecosystem.
This is a milestone event, Steve Sosnick, chief strategist in interactive brokers, told Cointelegraph, “Because they want it or not, or know it or not, equity investors who buy S&P 500 index funds will now have a crypto exposure through the coin.” In fact, Coinbase can now get billions -billions of dollars to passive investors just flowing from being a part of the S&P 500.
“What is noteworthy is that a few months ago, the company was engaged in a severe legal conflict with the SEC, charging that its platform was illegal because it was trafficking with unregistered security,” benchmark analyst Mark Palmer said CNBC.
“It has normalized crypto exposure to conservative portfolios that if not avoid digital possessions” and bring indirect adoption of institutional investors, retirement plans and sovereign funds with greater importance to the industry, Habibi added.
However, it is only a few hours some The crypto firm will be taken to the S&P 500 fold, Russell Rhoads, Clinical Associate Professor of Financial Management at the Kelley School of Business Indianapolis, Cointelegraph said. “This makes sense for coins or some other crypto -related firm in the index, as the industry is becoming more important to the global economy and you want the S&P 500 constituents to be economic representatives.”
Separately, coinbase too reported A violation of data last week, a “compromise of passwords or private keys” that would eventually cost a crypto exchange of $ 180 million to $ 400 million.
Hack has exposed personal information of ten -tenth thousand users and left them Poor In robbery and kidnapping, as seen in violation of the 2021 ledger.
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Meanwhile, integration with the S&P 500 means that “Index funds, including those managed by Blackrock, Vanguard and State Street, should provide capital to Coinbase,” Habibi told Cointelegraph. “It means billions of dollars in passive investment are flowing into a native crypto business.”
$ 10 billion in new capital flow?
How much money can Coinbase flow in the way? Passive investment (for example, investing in an ETF that reflects the S&P 500) has spread in recent years. S&P djii Attached In 2024 approximately $ 10 trillion today is simply monitored by S&P 500.
If Coinbase only gets a 0.1% weighing – a part that Habibi thinks is justified – it can reap $ 10 billion in potential capital flows without a investor who actively chooses crypto exposure.
Acceptance of the institution may be the bigger story here, Habibi continued. Coinbase’s integration with index signals that public markets are rewarded today not only growth, but adherence to regulation, operational maturity and long -term views of the crypto space. He added:
The move gives way to other crypto companies-for example, circle, chainalysis, fireblocks-to aim for public lists and final index integration, which potentially trigger a new wave of companies with a crypto-grade-grade.
It may be earlier to talk about a scene of the crypto and tradfi economic sectors, however, as some do. “Crypto, in general, is a very small part of the general economy,” Seoyoung Kim, associate finance professor at Santa Clara University, told Cointelegraph. “I think the bigger scene coming ahead is the increasing institutional adoption of blockchain-based protocols and tokenization.”
A convergence of economies?
Others do not agree. “We’re talking about Tradfi-Crypto Convergence for a little time,” Owen Lau, executive director of Oppenheimer & Co, told Cointelegraph. “This is happening and it will continue to happen. Robinhood/Bitstamp, Kraken/Ninja Trader and Ripple/Hidden roads are good examples.”
“We are not entirely throughout the scene, but we certainly have past the phase of separation,” Kennard’s opinion. He, too, referred to the Crypto ETFs but also taught in recent events, such as the Galaxy Digital list of NASDAQ this month and Coinbase’s role as guardian for many ETFs, showing that Transa companies are now looking for crypto-native companies for some infrastructure needs. “The clarity of the regulation is still emerging, but institutional railroads are rapidly laid out,” Kennard said.
More equity lists mean that crypto companies can tap into markets as a source of liquidity, but it does not have to be involved in a convergence of financial channels, stated in interactive broker ‘Sosnick. “The convergence will take place when a traditional financial company has truly adopted crypto as a payment form.”
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However, Habibi pointed to the scene in infrastructure solutions, such as the JPMorgan’s Onyx platform used to improve billions -billions of Intraday Repo transactions using Blockchain technology, NASDAQ’s Digital Asset Custody Infrastructure and PayPal USD’s PayPal USD launch (PIUSD) Stablecoin, which includes crypto railroads and consumer finisch.
“Ang mga halimbawang ito ay binibigyang diin ang isang paglilipat kung saan ang crypto at tradfi ay hindi na nakikipagkumpitensya ngunit ang co-umuusbong. Ang mga kumpanya ng crypto-katutubong ay nagsisimula upang maging katulad ng mga tradisyunal na institusyong pampinansyal sa istraktura, habang ang mga bangko ay nagpatibay ng mga desentralisadong teknolohiya upang mapagbuti ang kahusayan, bawasan ang pag-areglo ng alitan, at Expand the reach of the property, “Habibi explained.
Who’s next?
Now that Coinbase is broken, should one expect other crypto companies to get S&P 500 integration as soon as possible? Maybe not.
A large market capitalization is required to join the S&P 500, but the one who is not enough. There are other criteria. A candidate can be useful in the latest year and quarter to qualify, for example. “The Galaxy Digital is newly listed (in Nasdaq), but (it still) requires the same profitability,” Kennard said. “Marathon digital, riot platforms and techniques are often mentioned but may be quite early on their journey.”
Lau does not expect any crypto companies-natively joined the S&P 500 anytime soon, even if it may happen in the next two to three years, he said. Rhoads ventured, “I’m not going to say this is the beginning of many crypto-related companies to join the S&P 500, as new members often replace a firm in the same industry-in this case, the coin replaces discover financial.”
The approach (MSTR) is a possible candidate. It can easily have the required market capitalization, but it finds difficult to meet index revenue requirements. “I don’t see the MSTR cut off,” Kim said.
“I’m not sure who’s next – even Gemini (privately) seems far -fetched based on values from their final funding,” Kim continued. “It’s really tough to do this on the S&P 500, and so we are likely to see existing S&P 500 companies that further strengthen Blockchain/Crypto services before we see a truly blue crypto company-meaning, one who started as a crypto company-entering the indice.”
It will be said in time, but for now, “I don’t know any crypto-related companies with enough cap cap and constant revenues that meet SPX standard,” Sosnick concluded.
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