Coinbase is joining the S&P 500, replacing Discover Financial Services in the benchmark index

Coinbase is joining the S&P 500, replacing Discover Financial Services in the benchmark index, according to a statement on Monday. Shares of the crypto exchange rose 8% in extended trading.

The change will take effect on May 19, before the opening of U.S. markets. Meanwhile, Capital One Financial is in the process of acquiring Discover.

Since completing its direct listing in 2021, Coinbase has become a bigger part of the U.S. financial system, with bitcoin soaring in value and large institutions gaining regulatory approval to create spot bitcoin exchange-traded funds.

Bitcoin spiked last week, topping $100,000 and nearing its record price reached in January.

However, Coinbase has been a particularly volatile stock and is trading well below its peak from late 2021. The shares closed on Monday at $207.22, giving the company a market cap of $53 billion. At its high, the stock traded at over $357.

Stocks that are added to the S&P 500 often see their shares rise in value because funds that track the S&P 500 will need to buy it for their portfolios.

The index, which is heavily weighted towards tech because of the massive market caps of the industry’s heavyweights, continues to add companies from across the tech sector. In September, Dell and defense software provider Palantir were joining the S&P 500, following artificial intelligence server maker Super Micro Computer and security software vendor CrowdStrike earlier last year.

To join the S&P 500, a company must have reported a profit in its latest quarter and have cumulative profit over the four most recent quarters.

Coinbase last week reported net income of $65.6 million, or 24 cents a share, down from $1.18 billion, or $4.40 a share a year earlier, after accounting for the fair value of its crypto investments. Revenue rose 24% to $2.03 billion from $1.64 billion a year ago.

Also last week, Coinbase announced plans to buy Dubai-based Deribit, a major crypto derivatives exchange for $2.9 billion. The deal, which is the largest in the crypto industry to date, will help Coinbase broaden its footprint outside the U.S.

Coinbase shares are down 17% this year, performing worse than bitcoin, which is now up about 10% in 2023.