Robinhood Markets will officially participate in the S&P 500 on September 22, replacing Caesars Entertainment, as part of the quarterly rebalancing of the index.
The integration, announced Through the S&P Dow Jones indices on Friday, it brings another company equivalent to the American stock index, which further expands the benchmark index exposure to the crypto sector.
“This movement expands the exposure and connection of the index to the economy of the digital asset,” Edwin Mata, co-founder and CEO of tokenization platform Brickken, told Cointelegraph.
“While S&P is still lacking in direct handling of cryptocurrencies, Robinhood’s role as a retail crypto gateway means the index does not directly get part of the sector’s growth and liquidity value,” Mata added.
Related: Robinhood’s tokenized stocks provoked a legal hornet’s nest
Robinhood, Coinbase Give S&P 500 a Crypto edge
Robinhood joined Coinbase, which was added to the S&P 500 in Mayas one of the two crypto companies facing the index currently included. Both operates as major access points on digital assets, exposing the index and, by expanding, passive investors in crypto.
“So the addition of Robinhood to the S&P 500 shows that crypto -related businesses are considered a strong pillar of the American market,” said Agne Linge, head of growth in decentralized Onchain Bank Wefi.
Following Robinhood’s participation in the S&P 500, All index funds And the funds that the exchange (ETF) exchanged (ETF) trace the benchmark monitoring is required to add a hood to their holdings, bringing a promotion of passive capital to the stock. However, it can also introduce extra volatility for the index.
“Incorporating both of these stocks with crypto exposure increases some risk – a marginal risk – in the S&P 500 because both of these stocks are of high beta value: 2.89 in the Coinbase case and 2.36 in the Robinhood case,” Linge said.
Beta is a measure of volatility of an investment or systematic risk associated with the general market. While higher beta values suggest more volatility, Linge said the tradeoff could benefit from long -term index holders.
“It also provides excellent exposure to normal people who only buy index funds playing safe, pension funds, and of course institutions that can now be comfortable with crypto exposure through one of the major investment tools such as S&P 500,” Linge added.
Related: Robinhood has launched Layer-2 Blockchain for Stock Trading in Europe
Jim Cramer is bullish on Robinhood
Meanwhile, CNBC’s Jim Cramer praised Robinhood following the addition of the S&P 500, calling it “juggernaut” that changed the retail brokerage landscape.
https://www.youtube.com/watch?v=1MYSIQN-hc8
He also noted the company’s ongoing expansion, from stocks, options and crypto to retirement accounts and credit cards. He called the firm a rare disrupor underestimated by Wall Street but now cannot be ignored. “It just came out, and killed it,” he said.
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