What happened

Shares of the large cryptocurrency exchange Coinbase (COIN -0.73%) were trading nearly 5% down at 11:56 a.m. EST for no obvious reason, although a few things could be driving the move.

So what

Recently, filings from the Securities and Exchange Commission revealed that insiders at Coinbase sold more than $40 million worth of stock in December. Now, insider selling is not always a bad indication, as you never really know the exact reason for the sales. Also, it's not unreasonable for executives and board members to want to cash out some of their holdings and reap the fruits of their labor. But obviously, it's better to see people buying stock than selling.

Red line with arrow trending downward.

Image source: Getty Images.

Additionally, the crypto market has been taking a beating in recent months, as the Federal Reserve has significantly changed its macro outlook and begun to taper its bond-buying program. Recent Fed minutes indicate that multiple interest rate hikes are coming this year and that the Fed may even shrink its balance sheet once the tapering is done and the first rate hike has happened.

Still, Bank of America analyst Jason Kupferberg recently upgraded Coinbase stock to a buy rating, citing the fact that the company is moving beyond individual trading fees, "a trend we think could accelerate in '22 and beyond."

Now what

Since going public in April of 2021, Coinbase and its big opening market cap of nearly $86 billion are down 35%. Obviously, the stock has a high correlation to the crypto market right now, which is volatile. Further revenue diversification could help it trade more independently, but in this market, I am sure investors will need to see proof of that first.