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The crypto company plots a public list in the US (yes, again). And those who dig deeper into the space could benefit from the “index effect” that increases visibility and demand.
This is a follow-up to sorting for the Crypto Public Listing Update I wrote last week. That was after Gemini took another step towards the IPO after American Bitcoin stocks hit the Nasdaq.
We also compared Coinbase and Robinhood, but please note that the latter company could join the S&P 500. On Friday, Hood discovered that it would actually be part of that index on September 22nd. Previous stocks boosted the news.
Robinhood's Crypto trading revenue was $160 million in the second quarter, accounting for 30% of the company's overall trading revenue. That $160 million fell approximately 37% from first quarter crypto revenue, but an increase of 98% year-on-year.
Robinhood doubled with Crypto this year, launching stock tokens in Europe, and Crypto is seeping into eligible US customers. They also ended the acquisition of BitStamp and shared plans for the Layer 2 blockchain.
Therefore, investors with capital in the S&P 500 fund will soon be automatically exposed to both coins and food. But those still trying to choose between them may consider what Blockworks research analyst Mark Aljon called the “beta vs balance” trade-off.
“Coinbase offers excellent upward convexity over the crypto cycle, but it also has significantly higher revenue volatility,” he wrote in an August 29 report. “Robinhood improvements, more repeatable EBITDA supports high quality multiples.”
Despite speculation that Michael Saylor's strategy could be added to the S&P 500, Bitcoin's biggest corporate holder has been removed from the index for now. Strategy has a market capitalization of $93 billion, about four times the minimum of $22.7 billion on the S&P 500, making it one of the largest companies that are not indexed.
The omission doesn't say much about the business of strategy, but benchmark analyst Mark Palmer argued in a research note on Monday about the evolving comfort level of the Index Committee with the Bitcoin-centric corporate model. After all, the company recorded a profitable second quarter. This is the last standard required for S&P 500 inclusion.
“But the index is not a purely rules-based club,” Palmer added. “The Committee explicitly reserves its decision to maintain sector balance and index representativeness so that companies can 'check all boxes' and still find themselves waiting for slots. ”
