01:24 PM EDT, 05/13/2025 (MT Newswires) -- Coinbase Global's ( COIN ) upcoming inclusion in the S&P 500 is expected to help boost institutional ownership in the cryptocurrency exchange, Oppenheimer said, as the company's stock rallied intraday Tuesday.

The company will replace Discover Financial Services ( DFS ) in the benchmark equity index, effective before the market opens May 19, S&P Global (SPGI) division S&P Dow Jones Indices said late Monday. Discover Financial's planned buyout by Capital One Financial ( COF ) is expected to be completed soon, S&P Dow Jones said.

The S&P 500 inclusion likely has "huge implications" for Coinbase and the crypto industry overall, Oppenheimer said in a note e-mailed to clients Tuesday.

"Getting into the S&P 500 not only increases purchases from index funds, but also puts (Coinbase) under a closer radar of non-index funds that benchmark against the S&P 500," analysts Owen Lau and Guru Sidaarth said. "Lack of deep institutional ownership was a bear thesis for (Coinbase), but it has now become a strong tailwind."

The brokerage raised its price target on the outperform-rated Coinbase stock to $293 from $269 assuming increased institutional demand. The company's shares were up nearly 23% in Tuesday afternoon trade.

The stock has been under-owned by institutional investors, according to the note. "S&P 500 rebalancing could also help (Coinbase) decouple a bit from crypto price movement," the analysts wrote. Other potential catalysts that could benefit Coinbase's stock include a further de-escalation in the ongoing trade war, the Federal Reserve lowering interest rates, and a resurgence of altcoins, Oppenheimer said.

The US and China have agreed to suspend most tariffs on each other's goods for 90 days. The two sides had been in a trade war since President Donald Trump's announcement of reciprocal tariffs early last month. Trump previously paused certain levies on non-retaliating countries.

The de-escalation of the trade conflict has "disproportionately" boosted altcoin prices such as Ethereum, Solana and XRP, which all contributed to Coinbase's first-quarter revenue by double-digit percentages each, according to Oppenheimer. Last week, the company reported revenue of $2.03 billion for the March quarter, up from $1.64 billion a year earlier.

Coinbase also announced last week that it agreed to acquire crypto derivatives platform Deribit for roughly $2.9 billion. Pro forma the acquisition, Coinbase has "substantial dry powder (that) positions (the company) very well to acquire another leader in this space, if opportunities arise," Lau and Sidaarth said.

Markets are expecting the Fed to cut rates in September and October driven by lower inflation expectations under a potentially robust economy, which could make it more appealing for investors to purchase riskier assets, according to the brokerage. "This backdrop is positive for crypto and could encourage higher trading volume," Oppenheimer said.

Price: 252.80, Change: +45.58, Percent Change: +21.99