(CTN News) – Following its inclusion in the S&P 500, Coinbase’s share price surged by over twenty percent on the day it commenced public trading. Following President Donald Trump’s electoral triumph, investors anticipated a significant surge in Coinbase shares.

Late Monday, S&P Global announced that Coinbase will take the place of Discover Financial Services, which Capital One Financial has acquired. This amendment will take effect before the market opens on Monday evening.

The likelihood that companies added to the S&P 500 index will see an increase in their value is substantial. This transpires because funds adhering to the benchmark will integrate the requisite securities into their portfolios.

Since Trump’s election, Coinbase has implemented many significant measures to regain influence with the White House. This endeavor is but one among several such endeavors.

Coinbase has implemented the method through various stages.

Investors anticipated that the Trump administration would implement more favorable bitcoin regulations on November 6, the day following the election. Consequently, Coinbase’s stock price surged by 31% on that day.

Throughout his four-year tenure, President Joe Biden had numerous problems and engaged in various contentious matters, which contributed to the proliferation of this hope. The firm and its chief executive officer, Brian Armstrong, were significant financial supporters of candidates that promoted cryptocurrency during the 2024 election campaign.

Coinbase, considered one of the most philanthropic firms, has donated over seventy-five million dollars to the Fairshake political action committee (PAC) and two more charitable organizations. Armstrong’s total contributions to the contestants amounted to almost one million three hundred thousand dollars.

Although the bitcoin business had considerable advantages during the initial months of the Trump administration, no regulation concerning cryptocurrencies has been implemented to date.

Simultaneously with the deregulation of the bitcoin market, the leadership resolved to create a strategic bitcoin reserve. Both conditions made it easier for such an event to occur.

Trump’s meme currency and other family businesses are under examination, fueling expansion. Coinbase’s stock fell by 26% in February and 20% in March due to Trump’s statements on tariffs, which have rendered markets volatile and caused investors to be wary of risk-taking.

Likewise, the price of Coinbase has experienced significant volatility.

Consequently, the stock has risen by over two percent thus far in 2018 due to the increase that transpired on Tuesday. Since its direct IPO in 2021, Coinbase has emerged as a vital element of the financial system in the United States.

The value of Bitcoin has skyrocketed because major institutions now have the regulatory authority to create exchange-traded funds focused on spot Bitcoin transactions. Last week, the price of Bitcoin reached a new all-time high of $100,000, approaching the milestone attained in January.

Previously, the price of Bitcoin had reached $300,000. The cryptocurrency attained a record high of $104,000 on Tuesday, exceeding its former peak. To qualify for inclusion in the S&P 500, a company must demonstrate consistent earnings over the past four quarters and report a profit in the most recent quarter.

On the preceding Monday, Coinbase declared a net profit of $65.6 million, translating to 24 cents per share. The corporation’s net income declined from $1.18 billion to $4.40 per share in the prior year, factoring in the actual value of its bitcoin investments. This year’s overall sales amounted to $2.03 billion, reflecting a 24% rise from last year’s total of $1.64 billion.

Furthermore, the business announced last week its intention to invest $2.9 billion in Deribit, a prominent bitcoin derivatives exchange located in Dubai. The agreement, the most substantial transaction in the bitcoin business thus far, will enable Coinbase to extend its operations beyond the United States.

SOURCE: CNBC