Crypto Security & Coinbase’s S&P 500 Milestone: Risks, Opportunities, and the Future Explained

Summary

Earn Your Leisure Podcast Summary

Episode Title: Crypto Security & Coinbase’s S&P 500 Milestone: Risks, Opportunities, and the Future Explained
Release Date: May 21, 2025
Hosts: Rashad Bilal and Troy Millings
Podcast: Earn Your Leisure

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Introduction

In this insightful episode of Earn Your Leisure, hosts Rashad Bilal and Troy Millings delve deep into the recent milestone of Coinbase being added to the S&P 500, exploring its implications for the cryptocurrency market, the associated security challenges, and future prospects. The discussion blends financial analysis with industry insights, making it a must-listen for anyone interested in the intersection of finance and pop culture.

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Coinbase’s Inclusion in the S&P 500

[01:37] Crypto Analyst:
Troy initiates the conversation by highlighting Coinbase's recent inclusion in the S&P 500, emphasizing the surge in its stock price and the positive sentiment it has generated within the crypto community. This milestone not only validates Coinbase's position in the financial market but also signifies a broader acceptance of cryptocurrency as a legitimate asset class.

Quote:
"Last week Coinbase was named into the S&P 500 and you know that skyrocketed their stock. And it's also been encouraging news for the crypto community as a whole."
— Crypto Analyst [01:37]

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Security Breaches and Their Impact

The discussion shifts to the critical issue of security breaches that Coinbase has faced. Despite its inclusion in a prestigious index, Coinbase has been grappling with significant security challenges that have raised concerns about the safety of cryptocurrencies.

[02:13] Crypto Expert:
Rashad comments on Coinbase's handling of security issues, praising the leadership's transparency. He points out that while Coinbase's actions address immediate concerns, the broader crypto market still faces substantial security vulnerabilities.

Quote:
"I think the security issue is just a penalty of leadership. I think Brian handled it pretty well. I think he was very direct in addressing it."
— Crypto Expert [02:13]

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Bitcoin’s Dominance vs. Other Cryptocurrencies

A substantial portion of the conversation revolves around Bitcoin's unparalleled performance compared to other cryptocurrencies. The hosts and experts discuss whether Coinbase's inclusion provides additional credibility to Bitcoin and other altcoins.

[02:42] Crypto Analyst:
Troy differentiates between Bitcoin and other cryptocurrencies, suggesting that Bitcoin has firmly established itself, while other coins still need to prove their long-term viability.

Quote:
"It's outperforming Bitcoin or no Bitcoin crypto or. All right, cryptocurrencies outside of Bitcoin. Because I think. I think at this point people have already solidified Bitcoin."
— Crypto Analyst [02:42]

[02:56] Crypto Expert:
Rashad echoes this sentiment, emphasizing that most altcoins are not yet institutional assets and posits that Bitcoin remains the primary investment in the crypto space.

Quote:
"I think the cryptocurrency market at large needs some reform and just needs better projects, for sure. But as far as Coinbase's inclusion, I think it goes to the testament of people want higher returns and they want something that isn't necessarily tied to the dollar in the current regime."
— Crypto Expert [02:56]

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Investment Alternatives: IBIT and MicroStrategy

The hosts explore alternative investment avenues for those interested in crypto without directly owning cryptocurrencies. They compare the merits of investing in the Bitcoin ETF (IBIT) versus MicroStrategy, a company with significant Bitcoin holdings.

[05:22] Crypto Analyst:
Troy explains that IBIT offers a regulated way to invest in Bitcoin's performance without the complexities of holding the actual cryptocurrency, making it appealing for those wary of security risks.

Quote:
"Owning Coinbase is not like owning Bitcoin. It's related because it's like what you just said. It's the brokerage. But yeah, if you do want to have, if you want to mimic Bitcoin's performance on the stock market and not actually own Bitcoin and not have to, you can, you can buy IBIT."
— Crypto Analyst [05:22]

[07:29] Crypto Expert:
Rashad discusses why one might prefer IBIT over MicroStrategy, highlighting cost-effectiveness and the direct tracking of Bitcoin's value.

Quote:
"It's cheaper if you get in that 43 bucks. 43.20 Ibit. It's currently at the high. Well not a high $59. Almost at the high of 61. It's way cheaper than MicroStrategy as well."
— Crypto Expert [07:29]

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Future Outlook and Market Impact

The conversation turns to the future of Coinbase within the S&P 500 and its potential impact on the broader cryptocurrency market. The hosts speculate on whether Coinbase's inclusion will drive further institutional investment and stabilize the market.

[09:03] Market Analyst:
Troy posits that Coinbase's addition to the S&P 500 could enhance its appreciation potential, given its legitimacy and the increased scrutiny that comes with being part of a major index.

Quote:
"What we posted on Instagram, but you know, there's a Michael Turpin, so it's interesting. This, this made news. 2018 hacker stole 24 million worth of crypto from his phone."
— Crypto Analyst [09:12]

[09:44] Crypto Expert:
Rashad commends Coinbase's resilience and leadership, predicting that their stock could continue to rise as institutional confidence grows.

Quote:
"I think their inclusion is needed and it's very good. And credit to S&P for including them because there's a lot of legacy companies that they probably could have kept in. But I'M glad that they were included. And I think they should get to 378."
— Crypto Expert [09:44]

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Security Enhancements and Recommendations

Addressing the paramount issue of security, the hosts discuss the increasing incidents of crypto theft and the necessity for robust security measures within the industry.

[13:36] Market Analyst:
Troy raises concerns about the lack of insurance for crypto holdings, highlighting the vulnerabilities users face when storing their assets on platforms like Coinbase.

Quote:
"Crypto is this security aspect has not been solved. It's not, it's not an issue that has been solved. It's an issue that's actually, it's only getting bigger."
— Crypto Analyst [13:36]

[14:06] Crypto Expert:
Rashad suggests that Coinbase and other crypto institutions need to implement stronger security protocols, such as triple-factor authentication, to protect against ongoing threats.

Quote:
"You do need to fix that issue for sure. So triple factor authentication or something."
— Crypto Expert [14:06]

[15:02] Crypto Analyst:
Troy emphasizes that while advanced security measures like cold wallets are available, they may not be practical for the average user, who prefers institutional custody solutions despite their risks.

Quote:
"They feel comfortable putting $5 million in Charles Schwab. They don't feel comfortable actually having $5 million in their. In their possession."
— Crypto Analyst [15:02]

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The Role of Cybersecurity Firms

The discussion also touches upon the importance of specialized cybersecurity firms in safeguarding crypto assets, especially as the value and prevalence of cryptocurrencies continue to rise.

[15:37] Crypto Expert:
Rashad questions whether cybersecurity firms like CrowdStrike have dedicated divisions for crypto, underscoring the need for tailored security solutions in the crypto space.

Quote:
"Does CrowdStrike have a crypto division where they solely focus on crypto or no."
— Crypto Expert [15:37]

[16:21] Market Analyst:
Troy anticipates that as technologies like artificial intelligence integrate further into cybersecurity, firms specializing in these areas will become indispensable for protecting digital assets.

Quote:
"And we're speaking about crypto, but even in artificial intelligence as well, for sure. You can see how this technology, especially when we talk about cyber companies, Crowdstrike, Palo Alto, Zscaler, all these companies, how important they will be."
— Market Analyst [16:21]

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Conclusion

The episode wraps up with a consensus that while Coinbase's inclusion in the S&P 500 marks a significant milestone for the company and the crypto industry, substantial challenges, particularly in security, remain. The hosts advocate for continued innovation in security measures and prudent investment strategies to navigate the evolving landscape of cryptocurrency.

Final Takeaway:
"Coinbase's journey to the S&P 500 underscores the growing legitimacy of cryptocurrency in mainstream finance. However, as the market matures, addressing security vulnerabilities will be crucial for sustainable growth and investor confidence."

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Note: This summary excludes advertisements and non-content segments to focus solely on the substantive discussions within the episode.

Transcript

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[Crypto Analyst]

So let's get into the crypto conversation. Last week Coinbase was named into the S&P 500 and you know that skyrocketed their stock. And it's also been encouraging news for the crypto community as a whole. So going forward but they also had an issue as far as for sure, security breach. So let's talk about the security issue and let's also talk about Coinbase future as far as its stock price and you know, stability as a company.

[Crypto Expert]

I think the security issue is just a penalty of leadership. I think Brian handled it pretty well. I think he was very direct in addressing it. He didn't skirt around the the leak of the news or the break of the news. So I do like that as far as them being included, a lot of people were asking does this give crypto a lot more credibility? And I'm gonna be honest with Bitcoin, if It's the highest return of asset of all time. How much more credibility does it need?

[Crypto Analyst]

It's outperforming Bitcoin or no Bitcoin crypto or. All right, cryptocurrencies outside of Bitcoin. Because I think. I think at this point people have already solidified Bitcoin.

[Crypto Expert]

Yes.

[Crypto Analyst]

When they say gave credibility to crypto. I think they're talking about every other cryptocurrency outside of Bitcoin.

[Crypto Expert]

Most, I think, are not institutional assets to hold long term, even on the retail side. I know I don't want to cause a war between other crypto factions, but there's only one to invest in currently if you want an incredible return. I think the cryptocurrency market at large needs some reform and just needs better projects, for sure. But as far as Coinbase's inclusion, I think it goes to the testament of people want higher returns and they want something that isn't necessarily tied to the dollar in the current regime. Do I like Moon, Coin or Solano the most? I mean, I think we. We've had the conversation enough. XRP is still fighting a good fight and hopefully they'll make a turnaround. But if you want some exposure that is not tied directly to Michael Saylor, Coin is a good alternative, even though I think MicroStrategy is better. But I think we can be very honest. The overall crypto market, there is nothing to invest in but Bitcoin.

[Market Analyst]

Yeah. I think that's what makes it interesting is that when you. Bitcoin and Coinbase are synonymous with each other at this point, because Coinbase is the largest custodian of bitcoin in the world. They own 12% of all the bitcoin. Right. At this point, right now, I think they said that they manage over 400 billion in cryptocurrency, which is a great uptick from last year, where I think they closed at 325 billion. But they also are the largest custodian of Ethereum as well. And so if it we. Will it impact the entire space? No. Will it impact certain coins?

[Crypto Expert]

Yes, for sure.

[Market Analyst]

Ethereum is one of them. They also are the largest custodian of Solana as well. And so those are three coins. If Coinbase is the custodian of. And you're trying to invest in a space without directly investing in it. Yeah, Coin makes a lot of sense and it's obviously the first digital asset to be on the S&P 500. So it's a major, monumental moment. Like you said, Bitcoin's already been solidified once it crossed certain thresholds. 50,000, 75,000, a hundred thousand. Now it's been there. But coin, I mean, it's a good investment if you're looking to be in the space without directly owning those coins.

[Crypto Analyst]

Well, yeah, for sure.

[Crypto Expert]

Pushback. Thank you.

[Crypto Analyst]

I was going to say, because for people that's listening, the close. All right, the, the next best thing to not own a Bitcoin is, is owning the Bitcoin ETF, iBit. So it's related. Coinbase is related, but it's not direct because some people is still an educational process that for sure keep in mind. So I don't, I want people just to fully understand because we can. You can't take it for granted. Owning Coinbase is not like owning Bitcoin. It's. It's related because it's like what you just said. It's, it's the brokerage. But yeah, if, if you do want to have, if you want to mimic Bitcoin's performance on the stock market and not actually own Bitcoin and not have to, you can, you can buy Ibit and there's other Bitcoin ETFs which track Bitcoin. Now, why would you do that? Because if you feel like you're not 100 confident with crypto as far as the security, there's no recourse. If, if money gets, if your crypto gets stolen, IBIT is on the stock exchange, so it's regulated. You get it through the brokerage, there's some level of security. There's. It's also. That's important for people to understand because a lot of people still don't understand crypto. They understand Bitcoin. They want to buy it, but they don't understand it. They don't understand the nuances of, to keep the coin safe. And the difference between a cold wallet and a hot wallet, it's kind of like mumbo jumbo. So. And then for the people that's like, all right, well, if you don't invest in Bitcoin, then IBIT is not Bitcoin. Yes, true. But the thing about Bitcoin is that it's, it's liquid. You can always buy Bitcoin. So if you can, you can buy IBIT and at any point in time cash that in and buy Bitcoin. But at least you're actually still participating in upward mobility of Bitcoin. If you feel that Bitcoin is a good investment without having to go through all of the hurdles and obstacles that could potentially happen because of owning the outright cryptocurrency.

[Crypto Expert]

I got to ask a million dollar question. Why I bid over MicroStrategy.

[Crypto Analyst]

Ibit tracks Bitcoin dollar for dollar as far as like whatever it does. IBID does that. MicroStrategy is once again that's like a Coinbase type thing but it's more centered around Bitcoin where that is a Bitcoin linked investment but it's not direct. So Bitcoin can go up and MicroStrategy can go down. Hypothetically. Right. Like it. But it's also designed to. It has higher volatility than Bitcoin. So that's a. Microstrategy is something that if Bitcoin returns 10% microstrategy might do 20%.

[Crypto Expert]

Yeah.

[Crypto Analyst]

Right. So it's like you get higher leverage. So that's why a lot of people have done options on microstrate on MicroStrategy and then just purchase Bitcoin. Purchase Bitcoin for the long haul.

[Crypto Expert]

That's a good strategy.

[Crypto Analyst]

Options on Microstrategy so you get that accelerated growth in a short period of time. But for Bitcoin to ride. So I would say if, if you really just want to just do Bitcoin and want an alternative, Ibit is, is the way to go. Microstrategy is a. I'm trying to just fast track this thing and get as much money as I possibly can while Bitcoin is going up.

[Crypto Expert]

Yeah. And it's cheaper if you get in that 43 bucks. 43.20 Ibit. It's currently at the high. Well not a high $59. Almost at the high of 61. It's way cheaper than MicroStrategy as well. For those of you who are looking for a more cost effective alternative, what.

[Market Analyst]

Do we think about the appreciation potential for Coinbase now that it's being added to the S P500? How many funds will it be in? Will the price increase over the next six to 12 months?

[Crypto Expert]

I think so. On institutional side and just from a validity standpoint, it does take some of that concern or worry away from. Is this too volatile to. Well, if it's in the S P500, it has to be legit. And you have to give Brian credit. He's fought through a lot of wars. Business wise to be able to survive this. So I think their inclusion is needed and it's very good. And credit to S P for including them because there's a lot of legacy companies that they probably could have kept in. But I'M glad that they were included. And I think they should get to 378.

[Market Analyst]

Included. Discover Financial was removed, but they, they were acquired. I believe Discover Financial was acquired. But it's interesting, like you said, like, they IPO'd in 2012. Here we are in 2025. Yeah, when they IPO'd, it was an I. It was kind of around this idea, like, will this space even exist?

[Crypto Expert]

Exist? Yep.

[Market Analyst]

Right. So he, he wasn't coming in with the same type of favor that a lot of companies come in with. So to be here 13 years later and being part of the s and P500, it is a monumental moment. But I mean, the rent. So the, the security part is part of it. It used to feel like the safest way to do it. If I didn't know anything was to be coinbase. We know that not to be true from some stories that we've obviously heard and experienced. But, I mean, he put out a ransom the other day. He was like, look, they try to extort me for 20 million, I'm getting 20 million to the people who can find them.

[Crypto Expert]

Yes. Smart move.

[Market Analyst]

Yeah, that was okay. Brian. Brian's.

[Crypto Expert]

You can't pay any terrorists, man, because if they pay that 20, somebody else is going to hack an extra 200. It's a good business lesson. You cannot pay that exclusion fee.

[Market Analyst]

Yeah. And as the, the price of Bitcoin is going up, you've seen the amount of crypto theft go up.

[Crypto Expert]

Absolutely.

[Market Analyst]

I mean, this is, that's part of it. So security around that space is going to be paramount, especially as that price continues to climb and climb and climb. Because we don't see it stopping here at 100 right there. No, 150. It. It looks like that's a possibility around the corner. Right. So, yeah, security around the space is, is going to be a wave.

[Crypto Expert]

Oh, the last note. Crypto founders and crypto mega whales up your security. I know a lot of people may have seen a video where the husband and wife was almost kidnapped. If you go look at the amount of crypto whales that have had unfortunate circumstances the last three or four years, please be mindful. I will say that.

[Crypto Analyst]

And it's $2.2 billion was stolen in crypto in 2024. And so far this year, first four months, 1.7 billion has already been stolen. And that doesn't even account for the tool, the full crypto hacking and everything that's been going on. So when you look at it from a standpoint of crypto is this security aspect has not been solved. It's not, it's not an issue that has been solved. It's an issue that's actually, it's only getting bigger. And we posted this on Instagram, but you know, there's a Michael Turpin, so it's interesting. This, this made news. 2018 hacker stole 24 million worth of crypto from his phone. And how they did it was through a SIM swap scam. So they convinced AT&T to transfer his phone number and. Or they had somebody on the inside do it and they, they stole $24 million from his phone and he actually sued them for $224 million. So the reason why this SIM swap thing is interesting is that it actually happened to me. I can't prove this, but. But I'm pretty sure that's what happened because when my Coinbase got hacked, I had to take my phone in to get serviced and then we went to LA and then I actually had covet. It was a whole long story, but my phone stopped working for like two days. And then when it came back on, that's when my Coinbase was hacked. So I think that somebody inside the store, Swift, saw your Google Instagram and said, oh, SIM card swap. So that's. This is a real thing. So Coinbase security issue has not been solved.

[Market Analyst]

No. What is the max that's insured? Do we know? Is it, is it 200? Is it, is it FDIC?

[Crypto Analyst]

No, it's no insurance.

[Crypto Expert]

The bank does.

[Market Analyst]

The bank.

[Crypto Analyst]

That's why I said if you want to, if you want a safer route is ibit, because there's no insurance on crypto, Right. So there's nothing you can do about it. Even if, even if it's on Coinbase. It's not. There's no, there's no insurance for that.

[Crypto Expert]

Are we saying short Coinbase is always. That's Brian. But you do need, you do need to fix that issue for sure. So triple factor authentication or something.

[Market Analyst]

Triple the next legs.

[Crypto Analyst]

The vast majority of people's not going to do a cold wallet, right? The cold wallet is the. It looks like a USB drive, disk drive thing. And that's when you actually have, you know your code and you actually own your own crypto, meaning you're the sole custodian of it. But for most people, especially if you got a lot of money, but we're conditioned and trained to have institutions hold our money. Like, you know what I mean? Like, most people are not going to have $5 million and just put it in, in a safe. They would rather put $5 million in the bank. Feel comfortable with that.

[Market Analyst]

Right.

[Crypto Analyst]

They feel comfortable putting $5 million in Charles Schwab. They don't feel comfortable actually having $5 million in their. In their possession. So I don't know. I think crypto experts are going to have that, but the average everyday person I don't think is gonna.

[Market Analyst]

Yeah.

[Crypto Analyst]

Be comfortable with that.

[Market Analyst]

It'd be interesting to see what the encryption is.

[Crypto Expert]

Right.

[Market Analyst]

If you're holding 12 of the world's Bitcoin and you're managing over $400 billion of assets. Yeah. How is that.

[Crypto Expert]

How is that protected while being a target? Yep.

[Market Analyst]

I would love somebody to break that down for us. That. That's interesting.

[Crypto Expert]

Does CrowdStrike have a crypto division where they solely focus on crypto or no.

[Crypto Analyst]

Not sure.

[Market Analyst]

I'll give you that information momentarily.

[Crypto Expert]

Yeah. Because whoever finds a way to provide it extra layer of security, that's where the real money is going to be.

[Market Analyst]

Right. That's why I said that's going to be. That's the way. Right. And. And we're speaking about crypto, but even in artificial intelligence as well, for sure. You can see how this technology, especially when we talk about cyber companies, Crowdstrike, Palo Alto, Zscaler, all these companies, how important they will be. Not now, but I mean, definitely now, but even more so in the future. As that becomes more of the commonplace, these companies are going to be needed.

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