Coinbase Stock Nears Overvaluation as Expert Recommends Pair Trading with Bitcoin

Coinbase’s stock (COIN) is exhibiting signs of potential overvaluation, according to Markus Thielen, founder of 10x Research, as reported by Coindesk on June 27th. Thielen emphasized that despite the surge in Coinbase’s share price, the platform’s core metrics, particularly trading volume growth, have not aligned with this upward momentum. This divergence suggests a possible tactical reversal in the stock’s trajectory. To mitigate risk, Thielen recommended a pair trading strategy involving shorting Coinbase shares while simultaneously taking a long position in Bitcoin. This approach aims to capitalize on the relative performance gap between the exchange’s stock and the underlying cryptocurrency market. Investors should closely monitor these dynamics as Coinbase’s valuation metrics approach critical thresholds, signaling a potential recalibration in market sentiment.