• Some investors made 2,572% profits by shorting Coinbase stock just before the SEC lawsuit was made public.
• Unusual_whales noted suspicious investor activity and speculated that traders likely knew of the SEC’s decision to sue Coinbase.
• Market sentiment remained mixed for Coinbase’s future, though some believe that it will survive this setback unscathed.
Suspicious Investor Activity Around COIN Shares
Some investors shorted Coinbase shares hours before news of the SEC lawsuit became public. Unusual_whales, a platform that tracks stocks and crypto data, noted suspicious investor activity around COIN shares. Some investors opened $50 COIN weekly puts for $107,000 on June 6. The platform noted that the options were 19% OTM (Out of the money). A put option is OTM when the underlying asset’s price exceeds the put’s strike price. Later, when the SEC sued Coinbase, these positions exploded by over 2,570%, converting an initial investment of $100,000 into millions.
Market Sentiment Mixed for Coinbase’s Future
When news of the SEC lawsuit hit wire markets responded with mixed reactions about Coinbases future prospects. Some users believed that Coinbase was “DOA” while others called its response to the lawsuit “the less stupid version of Binance’s hilariously named ‘Tai Chi’ plan.” Furthermore, some speculated that Coinbase would aim to either survive long enough to get similar treatment as Uber and Lyft or make enough money to still have something left even if they ultimately lost their legal battle against the SEC.
COIN Price Recovers Slightly
COIN price recovered marginally after closing with a loss of 9% on June 5th. On June 6th it started trading at $45.5 before closing with over 12% gains at end of day trading session. On June 7th COIN prices rebounded further marginally as Cathie Wood increased holdings in Coinbase stating she believes Binance’s legal woes will benefit rival exchange .
Insider Trading Suspicions Gain Traction
Unusual_whales suspected traders likely knew about SEC’s decision to sue exchange prior to news going public which caused some speculation around insider training being involved in sudden increase in Put Options trading .
Although market sentiment remains mixed for Coinbases future , there are those who remain optimistic believing it will weather this storm unscathed . With share prices recovering slightly since news hit wire , only time can tell how this plays out in upcoming days .