Favourable Information arrives in the crypto market, Coinbase becomes a component of the S&P 500 index

Recently, favourable information has been frequently reported in the crypto market. On a macro level, the achievement of the US-China tariff ceasefire agreement has driven a surge in the global financial market. Although the price of Bitcoin has slightly retreated, the performance of Ethereum and other altcoins has been strong, triggering expectations for a new bull market.

In addition to the improvement in the macro environment, significant breakthroughs have also occurred within the industry. On May 13, Coinbase Global, the largest crypto exchange in the United States, will be added to the S&P 500 index, replacing Discover Financial Services, which is set to be acquired. This change will take effect before trading begins on May 19.

This marks a milestone progress for the encryption industry in the mainstream market, opening a new stage of development. Meanwhile, global enterprises and institutions are also starting to actively lay out in the crypto field.

On May 12, China and the United States reached a tariff ceasefire agreement in Geneva, temporarily ending a long-standing trade conflict. The agreement includes a 90-day suspension of mutual tariffs of 24%, retaining a base tax rate of 10%, and establishing a consultation mechanism with a third country. As a result, the US stock market surged significantly, with S&P 500 futures rising over 3% and the Nasdaq closing up 4.35%.

Although Bitcoin has fallen from $106,000 to $100,700, the crypto market as a whole has quickly rebounded, with Ethereum, Solana, BNB, and other altcoins showing good gains. As the tariff dispute has come to a temporary halt, the market is gradually returning to normal, with the bottom prices of most coins showing an upward trend.

In addition to the improvement of the macro environment, the industry has also welcomed Favourable Information. New Hampshire has passed a strategic Bitcoin reserve bill, authorizing the state treasurer to purchase Bitcoin or large digital assets, with a holding limit of 5% of total reserve funds. This has brought new incremental demand for Bitcoin. Furthermore, the new SEC chairman has clearly stated that a reasonable regulatory framework for the crypto market will be established during his term, continuously releasing positive signals. There are also reports that a large asset management company is in discussions with the SEC regarding an ETH staking proposal, further boosting market confidence.

Against this backdrop, Coinbase's inclusion in the S&P 500 Index is undoubtedly another important milestone in the development of the crypto market. As the largest compliant crypto exchange in the United States, Coinbase stands out in the global crypto exchange field. Over the past 13 years, Coinbase has experienced multiple bull and bear cycles, becoming an important window for traditional finance to observe the crypto industry.

In 2021, Coinbase went public on Nasdaq with the stock code COIN. On its first day of trading, the stock price surged to a high of $429.54, causing a sensation in the market. Since then, Coinbase's stock price has been closely related to the overall trend of the crypto market. During the downturn in 2023, the stock price briefly fell to $33.26, before regaining upward momentum. After being included in the S&P 500, Coinbase's stock price rose 24% on its first day, closing at $256.90.

Although it may not have a direct boosting effect on the market in the short term, in the long run, the entry of crypto companies into major U.S. indices represents recognition from the mainstream market, laying the foundation for the integration of the crypto industry with traditional finance. This not only helps attract more index allocation funds but also enhances the overall recognition of the crypto industry, drawing more attention from traditional investors.

Compared to Discover Financial Services, which will soon be replaced by Coinbase, the latter can attract approximately $13.5 billion in passive allocation demand with an index weight of 0.1%. This data may serve as a reference for potential future capital inflows into Coinbase.

In addition, the success of Coinbase has further driven the IPO craze among crypto companies. Recently, several well-known crypto companies have advanced their listing plans, and a certain well-known crypto exchange even restructured its corporate framework to meet regulatory requirements. The benchmark role of Coinbase will provide valuable experience for these companies.

Unlike the impact of IPOs on American crypto companies, businesses in Hong Kong are more focused on the synergy with the real economy, particularly laying out plans in the RWA (Real World Asset) track. Following the launch of the Ensemble project by the Hong Kong Monetary Authority (HKMA), which initiated a tokenization sandbox pilot, the RWA track in Hong Kong has accelerated its development once again.

Large tech companies are taking the lead and acting frequently. A blockchain technology company under a major e-commerce giant has begun to establish a team related to RWA, releasing multiple job recruitment information. The company also announced a partnership with a licensed virtual bank to provide financial compliance support for exploring cross-border payment solutions based on stablecoins.

Another technology giant's fintech subsidiary is progressing faster, with actual cases already implemented. Last year, the company collaborated with a green energy service provider to complete the country's first RWA case involving 200 million yuan based on photovoltaic physical assets. Subsequently, it also partnered with multiple blockchain projects to promote the practical implementation of RWA.

In addition to large technology companies, local crypto enterprises and financial institutions in Hong Kong are also actively laying out their plans. A certain on-chain financial infrastructure provider has engaged in in-depth connections with over 200 institutions, involving various fields such as traditional financial institutions, asset management companies, technology enterprises, and Web3 native projects, reaching cooperation intentions for RWA on-chain.

As the technology infrastructure gradually improves, supporting services are also keeping pace. Recently, several Hong Kong securities brokerages announced the launch of tokenized securities-related businesses, covering various asset types including structured products, funds, and bonds.

Overall, whether it's the IPO of American crypto companies or the local Hong Kong companies promoting RWA, in the current context of the crypto industry gradually gaining recognition, both companies and institutions show a positive attitude towards strategic deployment, although the methods of participation vary slightly due to regional differences.

Due to a relatively clear regulatory environment in the United States, market participation is more direct. Institutions are buying ETFs in large quantities, becoming the main support for cryptocurrency prices; listed companies are borrowing to buy cryptocurrencies to build new business models; large payment institutions are entering the market with stablecoins to seize market share.

In contrast, Hong Kong's approach is more cautious. Although the policy support is continuously increasing, strict compliance is still emphasized. Enterprises and institutions mostly expand their encryption-related businesses steadily based on existing operations, and the profit model is still under exploration.

As the mainstreaming of encryption assets continues to rise, more and more enterprises will get involved, and more funds, attention, and resources will flood into the market. This wave of institutional participation may just be the beginning.