Coinbase Global stock (ticker: COIN) has experienced a staggering surge in 2023, leaving some analysts wondering if it indicates a separation between bitcoin prices and volumes on the cryptocurrency-exchange platform.

Impressive Performance

With a 130% increase this year, Coinbase stock has been propelled by significant developments in the cryptocurrency market. One key factor is the legal victory of Grayscale Investments, a crypto asset manager, which opened the doors for a spot Bitcoin exchange-traded fund. In addition, a ruling in July clarified that XRP, a token created by Ripple Labs, does not fall under securities transactions. This ruling further bolstered Coinbase stock.

Mixed Signals

Despite the remarkable performance of Coinbase stock, Mizuho’s Dan Dolev remains skeptical. Dolev, who downgraded his rating from Neutral to Underperform in December last year, asserts that the traditional correlation between rising bitcoin prices and retail engagement may no longer hold true. He notes that unlike previous cycles, the fear of missing out (FOMO) no longer entices investors to actively trade bitcoin when prices rise.

Retail Concerns

Dolev raises concerns about Coinbase’s heavy reliance on retail investors, who account for 95% of its trading revenue. He questions whether the remarkable year-to-date rise in COIN’s stock is sustainable and anticipates a reality check.

Business as Usual

Despite the cautionary remarks, the reality check Dolev predicts has not materialized yet. Coinbase stock continues to climb, showing a 3.3% increase to $83.30 in Tuesday morning trading.

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