Coinbase (COIN, Financials) surged Tuesday after becoming the first cryptocurrency firm to join the S&P 500, a milestone that analysts say signals crypto's mainstream arrival.

Warning! GuruFocus has detected 6 Warning Signs with COIN.

The stock jumped nearly 15% following news that Coinbase will replace Discover Financial (DFS, Financials) in the S&P 500 index. The change will take effect before the market opens on May 19.

The move adds Coinbase to the portfolios of index-tracking funds, which analysts at Oppenheimer said could create sustained institutional demand. They raised their price target on the stock to $293, calling the inclusion a watershed moment for the crypto sector.

Coinbase, which has been building its institutional business and expanding globally, announced a $2.9 billion deal last week to acquire crypto derivatives exchange Deribit. The firm also reported a Q1 profit decline but continues to gain from a recovering digital asset market.

Despite the rally, shares remain down nearly 17% in 2025, making the S&P addition a potential turning point.

Investors are watching how quickly new inflows from index funds and ETF managers materializeand whether Coinbase follows through with more strategic acquisitions.

This article first appeared on GuruFocus.

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