Is It Too Late to Buy Coinbase Stock?

The crypto market is up for the year, so it's perhaps no surprise that stocks directly tied to the performance of crypto are also up. And not just up but up big. Coinbase Global (NASDAQ: COIN), the world's second-largest cryptocurrency exchange, is up a whopping 298% for the year. That's more than twice the performance of Bitcoin (CRYPTO: BTC), which is up 135% for the year.

But there are now signs that Coinbase might be overheating. The stock recently hit an 18-month high, and some high-profile investors are now selling to lock in profits. Ark Invest, for example, just sold off $15 million in Coinbase stock at the end of November. So, that raises an interesting question for investors: Is it too late to buy Coinbase stock?

To answer that question, it's important to take into account Bitcoin's performance. Historically, there has been a strong relationship between the price of Bitcoin and investor sentiment. If Bitcoin is going gangbusters and people are making money (at least, on paper), they will be more willing to invest in crypto. It's very similar to the "wealth effect" for the stock market: If stocks are rising, people feel wealthier and are more willing to buy.

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Source Fool.com