Coinbase (COIN) shares experienced a rally as Bitcoin (BTC) climbed past $80,000. Alongside the market movement, Goldman Sachs raised its price target on Coinbase stock from $173 to $196.
Unlike companies such as Strategy (MSTR), Coinbase does not hold Bitcoin directly on its balance sheet. Instead, the company's revenue relies largely on trading fees, meaning the stock generally rises when Bitcoin climbs and trading activity increases, and falls when volume declines.
Data from portfolio-analysis firm PortfoliosLab places the long-run correlation between COIN and Bitcoin at 0.61, indicating a moderate relationship. While the two assets often follow a similar year-to-date path, the ranking of crypto-linked stocks reveals that various crypto equities track Bitcoin differently.
A notable distinction lies in volatility. Coinbase's volatility has historically run more than double that of Bitcoin, measuring roughly 20% compared to Bitcoin's 8.5%. This amplification occurs in both directions.
During a mid-August push past $70,000 for Bitcoin, Coinbase shares gained about 9.5% one day and another 8% the next. Similarly, as Bitcoin extended its climb toward $80,000, COIN traded between $174.73 and $189.27 on Tuesday alone, marking a swing of over 8%. Overall, COIN recorded a 16% increase for the month.
The magnified price action applies downward as well. Market-data provider Kaiko noted in early August that Coinbase stock had dropped approximately 36% for the year, while Bitcoin's decline over the same period sat at roughly 27%. According to Kaiko, despite Coinbase's expansion into new business lines, its stock continues to move primarily in tandem with Bitcoin's price.
