Shares in Nasdaq-Listed Cryptocurrency Exchange Coinbase (COIN) Figur quickly approaches an overestimation threshold, said 10x research, led by Markus Thielen, Friday. Thielen recommends a parhandel that includes a short position in coin and a simultaneous long position in Bitcoin
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In a note sent to clients, Thielen explained that Coinbase’s basic elements, mainly trading volumes, have not kept pace with the rally in the share prices, which are quickly approaching the overestimation threshold, a classic setup for a “tactical turn.”
“While Coinbase has not completely violated the +30% overestimation threshold, it is approaching rapidly, and despite being one of the few high quality, listed crypto games, its current premium suggests the risk of underprestiation ahead,” detailed Thielen. “Dealers who want to take advantage of this dislocation may consider going long Bitcoin while they short -circuited Coinbase, or using options by selling a coin call and buying a BTC call to express the same view with defined risk.”
Basic interruption
According to the 10X’s linear regression model, 75% of Coinbase’s stock exchange rate is explained with Bitcoin’s price and trading volumes. This means that only 25% of the coin preaching is led by other factors, such as the potential effect of circular or American crypto and macro development.
Quantitatively suggests that COIN’s price tends to rise by $ 20 for every $ 10,000 movement in BTC and with $ 24 for each $ 100 billion increase in trading volume.
The recent price action suggests that the rally is overlooked in relation to Bitcoin’s award and trading volumes. Coinbase shares have risen 84% over the past two months, while Bitcoin has risen by only 14%.
“Not only is this premium stretched compared to Bitcoin’s current award, but it also seems to be disconnected from the underlying crypto oils hovering about $ 108 billion,” Thielen said. “This rare deviation suggests that Coinbases valuation is expanding and vulnerable to mean return.”
The report said other factors – Circle’s IPO on June 3, June 17 -Geni “StableCOin -Bill proposals and the buying madness of Korean investors – appear to be priced in.
“As this momentum is cooled, clearly in the recent returns of Circle, cocoaopay and metaplan, there is a growing risk that Coinbase shares can also approach a local top,” Thielen said.
