Citron advises investors to short Coinbase (COIN) stock

However, the renowned researcher remains optimistic about Bitcoin.

Coinbase has been on a strong run of late, with the platform beating analyst expectations and successfully rebounding from the trough of the crypto winter, according to newly released fourth-quarter 2023 data.

Reports say that the exchange recently suffered a technical glitch, which was reportedly caused by high traffic. This issue caused some users' account balances to show zero.

Quick recovery

The platform has now recovered from the outage, and Coinbase CEO Brian Armstrong also went to X to explain what happened.

Currently, all Coinbase functionality appears to be working normally except for PlayDapp (PLA) transfers.

Although this outage did not actually cause huge losses, the only impact on users was that they might experience some brief shock when they saw their balances go to zero. However, some long-established financial institutions have a different view of the incident, most notably Citron Research.

Short COIN, long BTC

Citron Research is an independent financial research firm founded by noted bearish investor Andrew Left, who has been “the face of Wall Street’s opposite” for the past 20 years. .

Despite Andrew Left's reputation and overall success, his company has made missteps in the past, such as calling for short selling on Ethereum following the decline of FTX.

Following the Coinbase outage, Citron is now calling on investors to short Coinbase’s stock. However, the financial research house also advises investors to hold their long positions on Bitcoin.

While COIN did drop slightly over the past few days, Coinbase stock has stabilized, according to MarketWatch data. It’s still unclear whether Citron’s predictions about Coinbase stock performance relative to Bitcoin will come true.

Other investors have also commented on the recent buzz surrounding Bitcoin, which saw its price rise above $63,000 yesterday. According to CoinMarketCap, the current price of BTC is $62,000.

Will, CEO of Graniteshare Advisors LLC Rhind said:

“Interest in the space is back. The Bitcoin ETF has always been in the spotlight and there will be some news on the sell-off, it’s been overhyped, but underneath the hype is a very real side and that’s the market over-hyping and, of course, the institutionalization of regulatory agencies.”

With Bitcoin recently approaching its all-time high price of $69,000 again, it’s safe to say that investor sentiment is likely to favor BTC ETFs launched by multiple financial institutions. As the go-to platform for large institutions to trade cryptocurrencies, Coinbase could reap significant returns.

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