Index fund managers mechanically bought COIN. They didn't care about decentralization; they just followed the quarterly rebalancing rules.
.png)
On May 19, 2025, in the final 30 seconds before the New York Stock Exchange opened, the trading terminals of S&P 500 index funds flashed red orders—hundreds of millions of dollars flooded into Coinbase's (COIN) stock pool. The fund managers, expressionless, typed away. They cared nothing for Bitcoin's ideals, knew nothing of blockchain's revolution, and had never owned a wallet address. But they knew one thing: the index rules forced them to hold Coinbase because it was now part of the S&P 500. And just like that, Wall Street's capital machine quietly placed the bridle on crypto freedom.
- The Road to Legitimization: From Regulatory Hell to Financial Heaven
Coinbase's compliance journey has been nothing short of a bloody and tearful epic. Three years ago, the company was fighting for survival in the SEC's legal storm. In June 2023, the SEC sued it on 13 counts of violating federal securities laws, accusing it of trading "unregistered securities." CEO Brian Armstrong hit back on social media, saying, "We'll see you in court!"
The drama turned in 2025. In February, the SEC suddenly dropped the lawsuit. Trump-appointed crypto-friendly lawyers took over the SEC, and the regulatory wind shifted 180 degrees. Three months later, Coinbase acquired derivatives giant Deribit for $2.9 billion, controlling 70% of global Bitcoin options open interest. By May 19, when the S&P 500's doors opened, Coinbase had transformed from a regulatory outcast to financial elite.
- Capital's Silent Battle: The Passive Funding Reconstruction Equation
According to Oppenheimer analysts, over $15 trillion in index funds had to buy in, with short-term passive buying demand reaching $9 billion. But the deeper impact was hidden:
269 million U.S. pension holders now "unwittingly hold crypto" through 401K accounts; 5 million teachers became indirect participants in the crypto economy.
Stock price volatility logic reshaped: Passive allocation acts as a cushion, partially offsetting crypto market volatility.
Wall Street's pricing power expansion: After acquiring Deribit, Coinbase controls the Bitcoin options market, with capital penetrating the core of crypto asset pricing.
This forced bundling is changing market behavior. Robinhood data shows COIN searches surge 300%, but only 12% of users understand its business essence. As ordinary people's pension accounts are tied to COIN's stock price, crypto's free - wheeling nature is being tamed by Wall Street's stability demands.
- The Twilight of Freedom: The Institutional Survival of Crypto Spirit
The crypto community once cheered for Coinbase's inclusion in the S&P 500, but the perceptive smelled danger. When Michael Saylor hailed it as a "Bitcoin milestone" on X, he omitted the implied message: Bitcoin's financialization means traditional capital is taking over.
The post - S&P 500 inclusion bull - bear pattern for Coinbase
Bullish logic chain: Regulatory pardon → Index inclusion → Institutional buying → Liquidity premium → Accelerated industry ETF development
Bearish warning chain: Compliance costs → Innovation curbs → User loss → Valuation disconnect from crypto market → Greater Wall Street manipulation
The real threat is at the values level. As the "do no evil" crypto spirit meets quarterly reporting pressure, Coinbase starts delisting anonymous coins and restricting DeFi access. The Deribit acquisition essentially uses centralized exchange logic to take over the derivatives market, which is against Satoshi Nakamoto's peer - to - peer electronic cash system vision.