Coinbase Stock Surges as Bitcoin Hits New Heights

Coinbase's stock is surging as Bitcoin climbs over $80,000 this week. Goldman Sachs has raised its price target on Coinbase to $196 from $173.

The link between Coinbase and Bitcoin's prices is not as tight as many assume. According to PortfoliosLab, the long-run correlation between COIN and BTC is 0.61, a moderate reading.

While Coinbase's stock tends to rise with Bitcoin's price, its volatility has run more than double that of Bitcoin over the long term. In mid-August, Coinbase shares gained around 9.5% one day and another 8% the next as Bitcoin pushed through $70,000.

The same pattern is seen in reverse when Bitcoin declines. In early August, Coinbase's stock fell about 36% for the year while Bitcoin dropped roughly 27%, according to Kaiko. Despite Coinbase's expansion into new business lines, its stock still moves mostly on Bitcoin's price.