Coinbase Global, Inc. (COIN) has recently experienced a significant surge in its stock price, driven by major market developments and strong technical indicators. The combination of its inclusion in the S&P 500 index, strategic acquisition moves, and the broader bullish momentum in the cryptocurrency market has created a compelling investment narrative. For traders seeking to capitalize on this momentum while managing risk, options spread strategies offer a structured and efficient approach.
This article explores the catalysts behind Coinbase’s recent rally, analyzes the market dynamics fueling investor optimism, and outlines two actionable options spread strategies designed to benefit from continued upside potential—while keeping risk under control.
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Catalysts Behind Coinbase’s Stock Surge
On May 13, Coinbase’s stock jumped 23.97% following the announcement that it would be added to the S&P 500 index. This milestone marks a pivotal moment in the company’s journey from a crypto-native exchange to a recognized mainstream financial institution. Inclusion in the S&P 500 ensures inflows from passive index funds and ETFs, providing sustained buying pressure and enhanced market credibility.
Since its direct listing in 2021, Coinbase has steadily integrated into the traditional financial ecosystem. The approval of spot Bitcoin ETFs by U.S. regulators has further solidified its role as a critical bridge between institutional capital and digital assets. As of May 23, COIN closed at $263.16, representing an 85% increase from its 2025 lows.
Beyond index inclusion, Coinbase announced a landmark $2.9 billion deal to acquire Deribit, a leading cryptocurrency derivatives exchange based in Dubai. This acquisition—the largest in crypto exchange history—positions Coinbase to expand its derivatives offerings and strengthen its global footprint beyond U.S. markets.
Bitcoin Bull Run Fuels Revenue Expectations
The broader cryptocurrency market has entered a strong bullish phase, with Bitcoin reaching a new all-time high of $111,000 last week. Historically, Coinbase’s revenue is closely tied to crypto market activity, as higher trading volumes and asset prices drive increased transaction fees and platform usage.
According to its Q1 2025 earnings report, Coinbase holds approximately $1.3 billion in crypto assets, with Bitcoin comprising the majority. This direct exposure amplifies its sensitivity to Bitcoin’s price movements, making COIN a leveraged play on crypto market sentiment.
Recent regulatory progress has also boosted confidence. Notably, the U.S. Senate advanced legislation supporting stablecoins, signaling a more favorable regulatory environment for crypto businesses. These developments reduce uncertainty and open doors for institutional adoption.
Technical analysis further supports the bullish case. Moving averages indicate a strong buy signal, with the stock trading well above key short- and long-term averages. Momentum indicators suggest sustained upward pressure, reinforcing the positive outlook.
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Options Strategies to Capture Upside While Managing Risk
For investors with a moderately bullish outlook on Coinbase, options spreads provide a balanced way to participate in potential gains while limiting downside exposure. Unlike outright call purchases, which can be expensive and risky, spread strategies reduce cost and define risk parameters.
Below are two structured options spread strategies expiring on June 20, 2025, designed for traders expecting continued strength in COIN.
1. Bull Call Spread (Vertical Spread)
Structure:
- Buy one Coinbase June 20, 2025 call option with a $265 strike @ $17.75
- Sell one Coinbase June 20, 2025 call option with a $270 strike @ $15.65
Net Debit: $2.10 per share ($210 total for one contract)
Maximum Profit: $290 (achieved if COIN trades at or above $270 at expiration)
Maximum Loss: Limited to $210 (net premium paid)
Break-Even Point: $267.10 ($265 strike + $2.10 net cost)
Why This Works:
This strategy profits if Coinbase reaches or exceeds the analyst consensus target of $268.10. It leverages the momentum from Bitcoin’s 28% rally since April 2025 while capping upside cost. The short leg reduces the overall premium, making it more capital-efficient than buying calls outright.
It's ideal for traders who expect steady appreciation but want protection against volatility or overpaying for options.
2. Bear Put Spread (Credit Spread)
Structure:
- Sell one Coinbase May 30, 2025 put option with a $260 strike @ $6.65
- Buy one Coinbase May 30, 2025 put option with a $255 strike @ $4.75
Net Credit: $1.90 per share ($190 total)
Maximum Profit: $190 (if COIN stays above $260 at expiration)
Maximum Loss: $309.50 (difference between strikes minus credit received)
Break-Even Point: $258.10 ($260 strike – $1.90 credit)
Why This Works:
This credit spread benefits from time decay and elevated short interest—approximately 13% of COIN’s float is currently sold short. As long as the stock holds above $260, the position generates profit. It acts as a low-risk way to collect premium while maintaining bullish bias.
This strategy suits traders confident in near-term support levels and looking to generate income from market stability.
Frequently Asked Questions (FAQ)
Q: Why is Coinbase being added to the S&P 500 significant?
A: Inclusion signals institutional acceptance and triggers automatic buying from index-tracking funds, boosting liquidity and long-term demand for COIN shares.
Q: How does Bitcoin’s price affect Coinbase’s business?
A: Higher Bitcoin prices increase trading volume, wallet activity, and asset custody value—all of which directly enhance Coinbase’s revenue streams.
Q: Are options spreads safer than buying calls or puts alone?
A: Yes. Spreads limit both potential loss and gain, offering defined risk and often lower capital requirements compared to naked options.
Q: What risks should I consider before trading COIN options?
A: Key risks include regulatory changes, cybersecurity threats (e.g., recent data breach), and crypto market volatility. Always assess your risk tolerance before entering any trade.
Q: Can I use these strategies in a retirement account?
A: Some spreads are permitted in margin-enabled IRAs, but check with your broker for specific eligibility and restrictions.
Q: How do I manage an options position if the stock moves against me?
A: Consider early exit, rolling the position forward, or adjusting legs to reduce exposure—always have a plan before entering the trade.
Final Thoughts
Coinbase stands at the intersection of technological innovation and financial evolution. With S&P 500 inclusion, strategic acquisitions, and tailwinds from the Bitcoin bull run, the company is well-positioned for continued growth. For active traders, options spreads offer a disciplined way to engage with COIN’s momentum without overextending risk.
Whether you're leveraging a bull call spread to capture upside or collecting premium through a bear put spread, these strategies align with current market conditions and technical strength.
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