Investors’ most favored cryptocurrency exchange, Coinbase Global (NASDAQ:COIN), witnessed a massive outflow of digital currency on October 18, as per data provider CryptoQuant. About 48,000 bitcoins (BTC-USD) valued at $940 million were withdrawn from Coinbase Pro yesterday. Following the news, COIN stock fell 4.3% to close at $66.21.
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The outflow marked the largest since June 2022 and the second biggest in crypto’s history. The withdrawal suggests that investors are looking to accumulate digital assets in the wake of the persistent downfall in the crypto market. Notably, these outflows could have been conducted in over-the-counter trade and thus did not impact the prices of BTC.
Hacks Continue to Challenge Digital Currencies
Hackers continue to siphon millions of dollars worth of cryptocurrency from digital wallets. Coinbase is facing its own legal fight from nearly 100 Coinbase Wallet users that were robbed of $21 million worth of crypto. Coinbase’s tepid security features are cited as the main reason for the robbery.
A lack of an appropriate regulatory framework remains the biggest challenge in making crypto a foolproof investment option. On October 10, the European Union approved the Markets in Crypto-Assets (MiCA) framework for regulating cryptocurrencies. Likewise, the Commissioner of the European Commission is pushing the U.S. to quickly pass a crypto bill, ensuring regulations that will uphold global implications, not just local ones.
Investors Display Confusing Signals for COIN Stock
On the one hand, retail investors seem to be holding back their investments in COIN stock. On the other hand, hedge funds are all-in on the crypto exchange.
TipRanks’ Stock Investors tool shows that investor sentiment is currently Neutral on Coinbase Global, with a meager 0.7% of portfolios tracked by TipRanks increasing their exposure to COIN stock over the past 30 days.
On the contrary, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Coinbase Global is currently Very Positive, as 19 hedge funds increased their cumulative holdings of COIN stock by 1.1 million shares in the last quarter.
Is Coinbase a Buy or a Sell?
Wall Street analysts are steering clear of COIN stock currently. On TipRanks, COIN stock has a Hold consensus rating based on eight Buys, seven Holds, and four Sells. The average Coinbase Global price forecast of $92.06 implies 39% upside potential to current levels. Meanwhile, the stock has lost a massive 73.6% so far this year.
Ending Thoughts
Coinbase’s reveling days of being the first mover in the crypto space are more than over. Increased competition among crypto exchange platforms, a prolonged crypto winter, and regulatory uncertainties put continued pressure on crypto stocks. Even institutional investors are withdrawing their currencies and analysts recommend steering away from COIN stock currently. All this might be viewed as appropriate investment advice in the current environment.
