When FTX filed for bankruptcy, Bitcoin (BTC-USD) did not fall by much. This set up a massive rally that sent BTC prices to $30,000 as of Jan. 20, 2023. This also squeezed shorts betting against Coinbase (COIN), a platform. Shorts have a 26% short interest against the stock.
COIN stock’s rally from ~ $32 to $55 does not make up for its drop from $217.49 at its 52-week high. Despite a rally in crypto, shareholders must consider Coinbase’s decision to halt operations in Japan.
Coinbase said on Jan. 18, 2023, that customers must convert their crypto holdings to JPY. The firm blamed market conditions for the difficult decision. The closure undermines Coinbase as a premier, global crypto platform.
Coinbase likely derived minimal revenue from Japan. After laying off staff, the firm wants to reduce its risk exposure. It will concentrate on its stronger geographical markets. It will strengthen its service level and platform quality in places that have the highest crypto activity.
Bearishness Mounts
Bears are unusually confident that COIN stock will fall again. Nearly one-quarter of its stock is shorted. This could set up a massive short squeeze. Furthermore, the unusual strength of Bitcoin adds to the unpredictability.
