S&P 500 debut Robinhood brings crypto to index investors

Robinhood joins Coinbase in the S&P 500 on September 22 as the next crypto company. It takes the place of Caesars Entertainment after the quarterly revision of the index. The recording of Robinhood was announced on Friday by S&P Dow Jones Indices.

“This movement broadens the exposure and connection of the index to the economy for digital assets,” said Edwin Mata of Tokenization platform Brickken.

Crypto-toegang in de S&P 500

With the recording, Robinhood therefore joins Coinbase, which was added to the index in May.

They are the only two companies with (in) direct crypto exposure in the S&P 500. Both act as important access points to digital assets.

“The recording of Robinhood shows that crypto-related companies are now being seen as strong pillars of the American market,” says Agne Linge, head of growth in the decentralized Onchain Bank Wefi.

Because all index funds and ETFs that follow the S&P 500 are obliged to include Robinhood shares (Ticker: Hood), a lot of capital automatically flows towards the share. At the same time, that can also entail extra volatility for the index.

“The recording of these two shares does entail some risk, because both Coinbase and Robinhood have a high beta: 2.89 for Coinbase and 2,36 for Robinhood,” says Linge. A higher beta points to more price fluctuations compared to the wider market.

Nevertheless, Linge sees benefits for long -term investors: “It offers ordinary savers, pension funds and institutions the opportunity to get exposure to Crypto through a trusted instrument such as the S&P 500.”

Cramer: Robinhood is a ‘Juggernaut’

CNBC presenter Jim Cramer responded enthusiastically to the recording. According to him, Robinhood has completely changed the retail investment market.

He pointed to the expansion of the company, of shares, options and crypto to pension products and credit cards. According to Cramer, Robinhood is a rare challenger who was underestimated by Wall Street but can no longer be ignored. “The company came out of nowhere and is now enormously successful,” said Cramer.