Crypto Exchange Coinbase (Coin) rises 16% on Tuesday early after Monday night of its inclusion in the S&P 500.
The currency will be added to the S&P 500 index after Friday’s closure, replacing Discover Financial Services (DFS) that is being acquired by Capital One (COF).
The Wall Street Bernstein broker estimates that the measure could lead to approximately $ 16 billion of purchase pressure for coinbase, around $ 9 billion passive funds linked to the S&P 500 and $ 7 billion of active allocations.
Coinbase is the “first and only cryptographic company to join the S&P 500,” wrote the analysts led by Gautam Chugani.
Chugani has a higher performance rating in Coinbase shares with an objective price of $ 310, or approximately another 30% upward of the current $ 240.
The KBW investment bank estimates that S&P 500 Passive Funds will need to buy 36 million Coinbase shares for the inclusion of the index, which is approximately 4 days of average purchase volume.
KBW also pointed out that as of April 30, 9.9 million Coinbase shares remained short, which are 1.4 days to cover.
“Since 2017, 500 financial agents have exceeded 5.2% in the day after the announcement,” Kbw said, and the addition of Coinbase could pave the way for other cryptographic companies to join the index.
Read more: Coinbase shares jump 8% in S&P 500 inclusion
