According to @QCompounding, research firm 10x Research, led by Markus Thielen, recommends a pairs trade of shorting Coinbase (COIN) stock while going long on Bitcoin (BTC). The firm's analysis indicates COIN shares are approaching overvaluation, having surged 84% in two months compared to BTC's 14% rise, creating a significant disconnect from fundamentals like trading volume. Thielen noted that a linear regression model shows 75% of COIN's price is explained by BTC's price and trading volumes, suggesting the stock's current premium is stretched and vulnerable to mean reversion. The report also highlights that MicroStrategy's (MSTR) perpetual preferred shares are rallying, potentially as investors front-run the company's anticipated inclusion in the S&P 500 index. According to analyst Jeff Walton, Bitcoin's record monthly close boosts MSTR's earnings per share to a level that qualifies it for the benchmark. The advance in preferred shares like STRK, which has returned 42% since its February launch, is also attributed to their attractive high yields, which currently surpass the Federal Reserve's target rate.

According to 10x Research, a compelling pair trade opportunity has emerged, recommending a short position in Coinbase (COIN) and a long position in Bitcoin (BTC). The research firm, headed by Markus Thielen, highlights a significant disconnect between Coinbase's stock performance and its underlying fundamentals. Specifically, COIN shares have surged 84% over the past two months, while BTC has only risen 14%, and crypto trading volumes have not kept pace, hovering around $108 billion. 10x Research's linear regression model, which explains 75% of COIN's stock price through BTC's price and trading volumes, suggests the stock is fast approaching a +30% overvaluation threshold. This deviation indicates Coinbase's valuation is extended and vulnerable to mean reversion, presenting a tactical opportunity for traders to capitalize on the dislocation by shorting COIN while going long on BTC.