(Bloomberg) — Coinbase Global Inc.’s rally has been unconquerable this week, as even a one-two punch of negative headlines did little to stop the crypto exchange operator’s climb ahead of its inclusion in the S&P 500 Index.

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Shares of Coinbase rose 34% over the last five sessions, the biggest weekly gain since President Donald Trump’s reelection, buoyed by an announcement Monday that the stock would replace Discover Financial Services in the index.

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It was a triumphant moment for the digital asset industry, as well as a stamp of approval for Coinbase itself. But Thursday’s revelation of a hack expected to cost the company $400 million and confirmation of reports that US regulators were investigating user figures marred Coinbase’s victory lap, denting an otherwise exuberant runup with a 7.2% drop in the stock.

Inclusion in the US benchmark index offers powerful support for stocks. Passive mutual funds and exchange-traded funds that track the S&P 500 are required to reshuffle their holdings to match the gauge, meaning they’re compelled to pile into Coinbase’s shares.

“The stock will have to come back because those people will have to buy it, they’ll have to own it, period,” said Matt Maley, chief market strategist at Miller Tabak. This week’s demand “has absolutely nothing to do with its fundamentals.”

To KeyBanc Capital Market’s Alex Markgraff the hack is unlikely to broadly erode trust among its customers, although the analyst sees a “modest overhang” from the news, both because of the financial impact and the risk that users could migrate to competitors such as Robinhood Markets Inc.

Miller Tabak’s Maley cautioned that the shares will be vulnerable to a delayed selloff next week, once buying support from funds dries up. And the shock waves from the week’s events could travel beyond a single company, he added.

If Coinbase’s induction to the elite club of S&P 500 members doesn’t go well, it could throw cold water on the entry of other players in the sector — and create headwinds for cryptocurrencies as an asset class.

“Like anything else, you try something new and it doesn’t work, it takes longer to try it a second or third or fourth time,” Maley said.

There’s still plenty to like about the company. Coinbase is the biggest US crypto exchange, and last week it reported quarterly revenue that jumped about 24% from a year before. It’s also making a push into the derivatives market with its $2.9 billion acquisition of Deribit.

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Shares of Coinbase have climbed more than 7% so far in 2025, outperforming the index its about to join, despite the roller-coaster ride shares have been on amid shifting sentiment in the cryptocurrency universe.

(Updates shares in second and final paragraphs, chart.)

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