It is a milestone event, Steve Sosnick, chief strategist at Interactive Brokers, told Cointelegraph, “because whether they want it or not, or know it or not, equity investors who buy S&P 500 index funds will now have crypto exposure via COIN.” Indeed, Coinbase could now get billions of dollars in passive investor flows just from becoming part of the S&P 500. “What’s remarkable about this is that just a few months ago, the company was engaged in an intense legal battle with the SEC, which was charging that its platform was illegal because it was trafficking in unregistered securities,” Benchmark analyst Mark Palmer told CNBC. “This normalizes crypto exposure in conservative portfolios that might otherwise avoid digital assets” and brings with it indirect adoption by institutional investors, retirement plans and sovereign funds that has broader industry significance, added Habibi.
More equity listings mean that crypto companies can tap markets as a source of liquidity, but that doesn’t necessarily involve a convergence of financial channels, stated Interactive Brokers’ Sosnick.“Convergence will occur when a traditional finance company truly adopts crypto as a means of payment.” Related: Senate stablecoin vote splits Democrats amid concerns over corruptionStill, Habibi pointed to convergence in infrastructure solutions, like JPMorgan’s Onyx platform that is being used to settle billions in intraday repo transactions using blockchain technology, Nasdaq’s digital asset custody infrastructure launch and PayPal’s launch of its PayPal USD (PYUSD) stablecoin, which integrates crypto rails and consumer fintech.“These examples underscore a shift in which crypto and TradFi are no longer competing but co-evolving.
Coinbase joining the S&P 500 doesn’t just boost the owner of the largest US cryptocurrency exchange.“It cements the legitimacy of an entire asset class,” she told Cointelegraph. Jason Kennard, head of business development at ARK Invest Europe, told Cointelegraph that for the first time, a crypto-native firm had met the stringent profitability, liquidity and market cap requirements of “the most iconic benchmark index” in global markets, adding:It sends a strong signal to institutional investors: Crypto infrastructure has matured into a credible, systemic part of the financial ecosystem.
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Author / Journalist: Cointelegraph by Andrew Singer
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