Key Takeaways
- Coinbase’s S&P 500 inclusion on May 19, 2025, marked the first crypto company in the index, boosting its stock by 24% and signaling institutional legitimacy.
- eToro’s IPO on May 14, 2025, raised $620 million, with shares surging 29%, reflecting strong demand for crypto-adjacent platforms.
- Galaxy Digital’s Nasdaq debut on May 16, 2025, capped a four-year regulatory journey, diversifying crypto’s presence in traditional markets.
- Bitcoin surpassing $100,000 in May 2025, alongside Trump’s pro-crypto policies, created a favorable environment for these milestones.
- These events collectively affirm cryptocurrency’s transformation from a fringe technology to a recognized asset class in global finance.
May 2025 marked a historic inflection point for crypto in mainstream finance. Three landmark events, Coinbase’s inclusion in the S&P 500, eToro’s successful IPO, and Galaxy Digital’s Nasdaq debut, collectively signaled a new era of institutional legitimacy for digital assets. These developments arrived against the backdrop of bitcoin surpassing $100,000 and a supportive regulatory environment under the Trump administration, representing the culmination of cryptocurrency’s transformation from a fringe technology to a recognized asset class within traditional finance. The convergence of these events demonstrates that crypto has achieved what industry advocates have long anticipated: recognition by and integration with the established financial order.
This Market Insights article examines how May 2025 marked a pivotal shift in crypto’s institutional acceptance, highlighting the mainstream integration of digital asset firms into global financial markets.
The Evolution Of Crypto In Mainstream Finance
Cryptocurrency’s journey from the margins to the mainstream has been marked by incremental legitimization through institutional adoption. This path began with early venture capital investments, progressed through the entrance of hedge funds and family offices, and eventually led to offerings from established financial institutions. The watershed moment of Bitcoin ETF approvals in early 2024 represented a crucial stepping stone toward broader acceptance, creating regulated vehicles for traditional investors to gain crypto exposure.
The policy environment has proven particularly influential in accelerating crypto’s integration with traditional finance. President Trump’s administration established a markedly different approach to cryptocurrency regulation after campaigning on promises to be a “crypto president.” In the early months of 2025, Trump formed a cryptocurrency working group to develop digital asset regulations and enacted an executive order establishing a federal reserve of bitcoin. These policy shifts provided the foundational regulatory clarity that institutional players had long awaited.
The resulting market environment proved conducive to Bitcoin’s ascent beyond $100,000 in May 2025, approaching its all-time high from January of the same year. This price movement reflected both improving sentiment and deepening institutional involvement in digital assets, creating the backdrop against which these three milestone events unfolded.
Coinbase’s Landmark S&P 500 Inclusion: A Special Moment For Crypto In Mainstream Finance
The Announcement & Market Response
On May 12, 2025, S&P Global announced that Coinbase would replace Discover Financial Services in the S&P 500 index, with the change taking effect before trading commenced on May 19. This marked the first inclusion of a digital asset company in the prestigious benchmark index. Market response was immediate and emphatic. Coinbase shares surged 24% the day following the announcement, marking their sharpest rally since the day after President Trump’s election victory in November 2024.
The inclusion culminated in Coinbase’s strategic positioning since its 2021 direct listing. Despite trading well below its peak from late 2021, the company had established itself as an essential part of the U.S. financial ecosystem with a market capitalization of $53 billion prior to the announcement. Oppenheimer analysts noted that this inclusion would benefit Coinbase in the long term as institutional investors developed strategies for entering the stock, prompting them to raise their price target to $293.
Significance For The Crypto Industry
Beyond the immediate price impact, Coinbase’s inclusion in the S&P 500 carried profound symbolic importance. Analysts from Bernstein characterized the event as symbolizing “dramatic turnaround fortunes for industry and rising significance the frontier financial innovation.” The inclusion effectively legitimized cryptocurrency as a sector within mainstream finance rather than an alternative to it.
This legitimization extended beyond Coinbase to the broader crypto ecosystem. As the largest publicly traded cryptocurrency exchange globally, Coinbase is a bellwether for the industry. Its inclusion in an index that represents approximately 80% of available market capitalization across the U.S. equity market affirms digital assets as a permanent fixture rather than a passing phenomenon in the financial landscape.
Institutional Investment Implications of Crypto In Mainstream Finance
S&P 500 inclusion creates significant mechanical buying pressure as index funds and ETFs that track the benchmark must add the stock to their portfolios. Academic research suggests this effect produces temporary price pressure around the inclusion date and potential long-term benefits through increased investor awareness. For Coinbase, this translates to a broader, more stable investor base and reduced volatility over time.
The inclusion also creates a new dynamic whereby traditional portfolio managers have indirect exposure to cryptocurrency markets through a regulated, compliant entity. This represents a bridge between traditional and digital finance, potentially encouraging further exploration of direct crypto investments among institutional allocators who previously maintained a distance from the sector.
Crypto In Mainstream Finance: The New Wave Of Crypto Public Listings
eToro’s Successful IPO
Just days after Coinbase’s S&P 500 announcement, the retail trading platform eToro completed its initial public offering, raising nearly $620 million in an upsized offering. The Israel-based company, which offers access to both traditional securities and cryptocurrencies, priced shares at $52 each, above its anticipated range of $46 to $50. When trading commenced on May 14, shares surged 29%, closing at $67 and valuing the company at over $5.4 billion.
eToro’s successful offering demonstrated robust investor demand for crypto-adjacent businesses beyond the pure exchanges. As a competitor to Robinhood, eToro’s business model combines traditional stock trading with cryptocurrency access, providing a hybrid approach that appeals to retail investors seeking diversified digital asset exposure. CEO Yoni Assia noted that the company had been waiting for stability in the CBOE Volatility Index after tariff-related anxieties before proceeding with the public offering.
Galaxy Digital’s Long-Awaited Nasdaq Debut
On May 16, 2025, Mike Novogratz’s Galaxy Digital completed the trio of significant crypto listings by commencing trading on the Nasdaq under the ticker GLXY. The stock opened at $23.50 per share and settled at $24.89 by day’s end. This listing represented the culmination of a four-year effort to secure U.S. exchange representation, having previously traded on the Toronto Stock Exchange since 2020.
Novogratz revealed that Galaxy had invested over $25 million and navigated nine rounds of communications with the SEC, a process that expanded from an expected 90 days to a staggering 1,320 days. This regulatory journey reflects the challenges crypto companies have faced in achieving compliance within the U.S. financial system. Novogratz characterized Galaxy as effectively two businesses: “both a data center organization and a cryptocurrency firm,” highlighting how crypto companies are diversifying their operations to position themselves at the intersection of multiple emerging technologies.
Academic Perspectives On Crypto-Traditional Finance Integration
Research examining the relationship between cryptocurrencies and traditional financial markets provides context for these developments. Studies have documented increasing correlation between bitcoin and major equity indices, with correlation levels intensifying following key institutional milestones and reaching peaks of 0.87 in 2024. This convergence suggests cryptocurrency markets are increasingly influenced by the same macroeconomic factors that drive traditional asset classes.
The mechanism of S&P 500 inclusion itself has been extensively studied, with research indicating that increased investor awareness is the primary factor behind cross-sectional abnormal announcement returns. For Coinbase, this suggests lasting benefits beyond temporary price pressure as the company enters the investment universe of a broader range of institutional allocators.
A New Era For Digital Assets: Crypto In Mainstream Finance
May 2025 will likely be remembered as the month cryptocurrency completed its journey from the financial fringes to the mainstream. The trifecta of Coinbase’s S&P 500 inclusion, eToro’s successful IPO, and Galaxy Digital’s Nasdaq debut collectively demonstrates that digital assets have achieved institutional recognition that would have seemed implausible during the industry’s earlier periods of regulatory uncertainty and market volatility.
The implications extend beyond these individual companies to the broader digital asset ecosystem. As Novogratz aptly observed, “I believe we are at the starting point of the race, not at its conclusion.” With favorable regulatory tailwinds and growing institutional adoption, these events may represent not the culmination of integrating crypto in mainstream finance, but rather the beginning of a more comprehensive transformation of the global financial system.
Michael Crag
