Popular short-seller Citron has targeted Coinbase stock after the exchange outage

Citron, an investment research firm founded by legendary Wall Street short seller Andrew Graff, called for a short sale of Coinbase (COIN) stock after the exchange's temporary suspension was lifted on February 28.

“The recent crash of the $COIN site makes the long Bitcoin/short Coinbase trade one of the most compelling trades in the crypto market,” Citron wrote on February 29. .”

The recent crash of the $COIN site makes the long Bitcoin/Short Coinbase trade one of the most compelling trades in the crypto market. This means going long Bitcoin through the ETF and shorting the upset Coinbase exchange.

— Citron Research (@CitronResearch) February 28, 2024

Institutional investors often go long one asset and hedge another so that the long asset will increase in value and the underlying short asset will lose value in the diversification trade. In the year On February 28, Coinbase, along with other crypto exchanges, experienced a temporary outage due to the Bitcoin (BTC) flash crash, which saw the digital asset fall 10% before recovering its losses.

During the Coinbase outage, users reported zero account balances and errors in buying and selling. “All customer account balance display issues have been restored,” the exchange said in a follow-up message on February 29.

Since the US Securities and Exchange Commission (SEC) approved Bitcoin trading in January, Coinbase has become the world's fourth largest publicly traded asset exchange with a market capitalization of more than $50 billion. In addition to Bitcoin's resurgence to the $60,000 milestone, the exchange has also benefited from being a custodian of the space's Bitcoin ETF managers, allowing them to exchange BTC transactions for ETF shares based on user demand.

Despite Citron's hidden position, the short seller is not always correct in his market predictions. In the year In late 2022, after the collapse of cryptocurrency exchange FTX, Citron called for shorting Ether (ETH) in a now-deleted tweet.

“We continue to be short ether as we believe this $130 billion token, like the entire history of SBF, has many common sense flaws,” the short seller said at the time. Since the sell advisory, Ether has recovered 182% and is now trading at $3,434.

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