Coinbase Global (COIN -1.69%) can't seem to catch a break. It went public in April, just as Bitcoin (BTC -0.37%) prices were peaking. Now that Bitcoin is on the rise, with many of its more speculative crypto peers faring even better, Coinbase is sitting out the rally.

Piper Sandler analyst Richard Repetto thinks that the stock is ready to bounce back. He calculates an 86% correlation between Coinbase stock and the price of Bitcoin. However, things haven't been playing along that way lately. After a springtime swoon, Bitcoin prices have risen 28% in the third quarter; Coinbase stock has declined by 4%. 

There are some good reasons for the disconnect (and we'll get to them shortly), but Repetto believes that the sell-off in Coinbase shares is overdone. He's standing by his overweight rating and $335 price target that suggests 38% in upside from Monday's close. It could be time for the crypto bellwether to start acting like one. 

Someone ripping away a business suit to show a Bitcoin logo as a superhero shirt.

Image source: Getty Images.

Not-so-stable Coinbase

It's been a wild ride for Coinbase investors through just five months of public trading. The stock initially took off after pricing its direct listing at a reference price of $250, trading as high as $429.54 on its first day on the market. It has gone on to give back all of those gains, and by Monday's close, it was trading below its reference price. 

Coinbase initially fared better than the crypto market on days when Bitcoin and other digital currencies tanked. It makes sense, as Coinbase is a trading platform; it profits from the volatility. But the recent role reversal, with Bitcoin climbing and Coinbase staying behind, also makes sense. 

There have been a couple of speed bumps on the Coinbase superhighway lately. Last month, CNBC broadcast a report about hackers draining Coinbase accounts, with little recourse for the victims. The issue has also shed light on the customer service shortcomings of the platform. It's hard to win as a trading platform if you can't be trusted.

Last week, it was the Securities and Exchange Commission sending a notice to the trading platform to block its launch of Coinbase Lend. The program would offer accounts that hold the Coinbase-issued stablecoin USD Coin (USDC -0.00%) a 4% yield in return for the exchange being able to lend it out to others. 

This week, it was plans for a $1.5 billion bond sale that irked the market on Monday. In short, there are some viable reasons why Coinbase has lost a step on the upticks of the coins trading on its exchange. The company finds itself putting out a couple of different fires, and it's raising money at an inopportune time. 

You still have to like Coinbase here as a broken IPO. Growth has been explosive in its brief stint in the public markets. Revenue soared 11-fold in its latest quarter, and its bottom line is growing even faster.

With 68 million verified users on a sticky and scalable platform, Coinbase has set itself up as one of the ultimate cryptocurrency stocks in the revolution. Once it stops stumbling (and it has certainly scraped its knees quite a bit this summer), it's going to be a sprinter worthy of growth-stock portfolios.