Wall Street just created a new class of crypto investor ― the inadvertent degen: mom-and-pop investors who are now exposed to the buzzing asset class.
On May 19, Coinbase, the top crypto exchange in the US, will become the first digital assets venture to join the S&P 500, the bellwether index of American companies.
This means Coinbase will have membership in the same exclusive club as Apple, Amazon, Berkshire Hathaway and other household names.
It also means the 13-year-old company’s shares will get a lift from millions of new investors who hold S&P 500 exchange-traded funds, often via retirement accounts.
$3 trillion
The scale is immense — State Street’s groundbreaking S&P 500 ETF, for instance, manages more than $572 billion in assets.
And in the last decade, so-called passive investors have ploughed almost $3 trillion into the market, according to Goldman Sachs.
Coinbase’s stock jumped 16% in mid-morning trading New York time, blowing away the S&P 500, which was up less than 1%.