Coinbase Shares Anticipate $16 Billion Buying Surge After S&P 500 Inclusion: Insights from Bernstein
Coinbase, a prominent crypto exchange, could experience a surge of 16% on its shares after recently being announced for inclusion in the S&P 500 index. This notable move is expected to result in approximately $16 billion of buying pressure.
This surge is projected to come from:
- $9 billion from passive funds associated with the S&P 500 index.
- $7 billion from active allocations.
According to Bernstein’s assessment, Coinbase’s status as the first crypto company to join this major stock index opens up new opportunities, potentially leading to similar inclusions for other digital asset firms in the future.
As part of this transition, Coinbase will replace Discover Financial Services, which is being acquired by Capital One.
Investment firms like KBW anticipate that approximately 36 million shares of Coinbase will be required for index inclusion, which accounts for about four days of average trading volume.
Analyst Insights: Gautam Chhugani, who leads Bernstein’s research, holds an outperformance rating on Coinbase, setting a price target of $310 for the shares, indicating about 30% upside from the current trading price of $240.
The future looks promising as prior trends suggest that stock additions to the S&P 500 have historically outperformed by 5.2% in the days following their announcement.
