For years, the S&P 500 has been the most important benchmark for mainstream US investment. However, in the move towards Wall Street and beyond, the index is the first member of the cryptography group, Coinbase Global, Inc. Includes (Coin).
When investing in an S&P 500 index fund, you invest in the world of digital assets, whether you plan or not. The analysis below will help you understand what this means for your portfolio.
Key takeout
Crypto jumps into the mainstream
Cryptocurrency and its exchanges have long been considered speculative outliers. It replaced Discover Financial Services, which officially joined the S&P 500 in May 2025, with Discover Financial Services, which merged with Capital One Financial Corporation (COF).
The move is based on Apple Inc. (AAPL) and JPMorgan Chase & Co., which are rooted in blockchain finance. For the first time, we are shown sitting side by side with a giant like (JPM). “Coinbase’s participation in the S&P 500 means that Crypto will be here,” said Brian Armstrong, CEO of Coinbase.
How Coinbase Inclusion Changes the Game
When Coinbase included in the index, the stock could jump and buy billions of dollars from both passive and active funds based on some estimates. This enhances liquidity and stabilizes stock prices over time, while also serving as a trust vote for the crypto industry.
However, crypto assets are still unstable and include in the benchmark index rarely changes this. Bitcoin, which first reached $100,000 in 2024, fell by about 38% from early February 2025 to mid-April 2025, but won around 40% from mid-April 2025 to the end of May 2025.
Fast fact
Coinbase represents approximately 0.11% of the total S&P 500 (as of late May 2025). So if your S&P 500 fund has $10,000, then only about $11 is associated with Crypto Exchange. This is a small slice, ranked roughly 180th by market capitalization by index, but it could be just the beginning of crypto-related assets.
What the data tells you
Investopedia’s analysis reveals: Over the past five years, Bitcoin and S&P 500 have traveled about 40% of the time in the same direction (a correlation of 0.38 from the beginning of 2020 to the end of May 2025). That may not sound very much, but it is actually a significant relationship in the investment world. And, like the massive sale after the first Trump tariff announcement in April 2025, at a moment of market panic, that connection jumped to almost 90%, then settled to around 70% (or 0.70) for the entire month. In short, Crypto has largely failed to act as a “hedge” of the stock market that its supporters once promised.
In the case of Coinbase, specifically, its stock price follows the S&P 500 movement of virtually half the same time (correlation is 0.53) between its initial public offerings from 2021 to late May 2025.
What does this mean to you? If you think your retirement account is safely diversified with boring old blue chip stocks, think again. The portfolio has a direct line to the crypto roller coaster, whether you bought one bitcoin or not.
Pros and Cons: What Coinbase brings to the S&P 500
Mainstream legitimacy: Coinbase inclusion could pave the way for other blockchain-based companies to join the index.
More risk/more potential rewards: Some crypto assets have outperformed traditional stocks over the past decade.
Wide range of access: Millions gain exposure without purchasing the code directly.
Improved volatility: Crypto price fluctuations could lead to turbulence injecting the S&P 500.
It’s still a crypto: Coinbase is still facing ongoing regulatory investigations and cyber threats.
Contagion risk: Strong crypto stock connections can amplify market shocks.
Conclusion
Coinbase’s inclusion in the S&P 500 could mark yet another turning point for Wall Street’s relationship with the crypto industry. Investors in index funds and retirement accounts are exposed to the ups and downs of digital assets by default.
This brings new opportunities for growth and diversification, but this means that the S&P 500 is a bit uninsulated from the wild fluctuations of the Crypto.
