9:00
4
min at reading ▪
Coinbase is probably going to capture passive purchases of $ 9 billion thanks to its entry to the S&P 500. A massive injection that could shift the crypto market to $ 8,000 billion. But behind this unprecedented institutional tide, quiet traps threaten the strategic freedom of society …
In short
- Coinbase integration into the S&P 500 could generate up to $ 9 billion in passive purchases.
- This tide could drive the capitalization of cryptos around $ 8,000 billion.
- This institutional recognition could reduce strategic freedom of Coinbase.
Coinbase: Input to S&P 500 with mechanical effects … and strategic
The announcement of May 12 confirmed that Coinbase would integrate the S&P 500, the subsequent discover. According to Bernstein analysts, this record could run up to $ 9 billion in passive purchase with the funds that replicate the index. This automatic investment mechanism, dictated by the logic of indexes, is not neutral: it installs Coinbase as a key asset in institutional wallets.
By connecting the reference index, the crypt company gains structural legitimacy. Coinbase thus becomes an interface between two worlds, and this inflow of capital already acts as the main institutional catalyst.
Stock market revaluation: Simple adjustment or new stallion?
The view of the passive tide is estimated at $ 9 billion associated with the integration of Coinbase in the S&P 500, evokes the central problem of the valuation. These purchases forced by index funds are not based on basic analysis, but on the mechanics of replication. However, this dynamics can cause structural overalls.
When Tesla entered the Index in December 2020, nearly $ 51 billion was put into the title and some analysts believe that the total amount would even approach $ 78 billion. Coinbase could follow a similar trajectory and become a stallion on the stock market for crypto, at the intersection of traditional and digital markets.
Training effect: Does the crypto market succeed?
Coinbase integration can have a secondary impact on the whole crypto market. As the main exhibition vehicle for traditional managers, coins become a representative of the dynamics of the website. Several effects are expected:
- Strengthening the confidence of institutionalists: the entrance door to the crypt without passing the tokens;
- Indirect valuation of chips listed on Coinbase: increased perception of their legitimacy;
- Halo Effect: Projects related to Coinbase ecosystem in speculative attraction.
This dynamics could speed up the market growth and drive the total capitalization of cryptocurrencies by $ 8,000 billion by the end of 2025. This projection is supported by bull bitcoin forecasts, some experts estimate that it could reach $ 225,000 in the coming months.
Coinbase face to face the risk of regulatory domestics?
If Coinbase to S&P 500 opens financial prospects, it also poses a strategic question: will society maintain its dexterity in a growing regulatory pressure? Exposure to traditional markets, associated with increased media attention, could force Coinbase to be cautious. There will be three risks:
- Standardization of discourse to assure shareholders;
- Reducing risk innovation in favor of products in accordance with institutional expectations;
- Progressive matching with American regulatory standards.
The paradox is there: The more important it becomes, the more it could lose strategic freedom. The bets are high for the ecosystem.
Coinbase goes through a historical course, but the influx of passive capital could also redefine its space for the maneuver. Between institutional legitimization and the risk of forced harmonization, the crypto enters the new era. It remains to be seen: sustainable growth or dilution of decentralized DNA Web3? The debate is open.
Maximize your Cointribne experience with our “Read to Earn” program! For each article you read, get points and approach exclusive rewards. Sign up now and start to accumulate benefits.
The world is evolving and adaptation is the best weapon that survives in this undulating universe. I am interested in everything about blockchain and its derivatives. To share my experience and promote an area that fascinates me, nothing better than writing informative and relaxed articles simultaneously.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.