Cryptocurrency trading platform Coinbase Global (NASDAQ:COIN) is seeing elevated bets against the public company with short interest doubling in 2026. Here's what that could mean for a share rally and potential short squeeze.

Coinbase Short Interest Rises

Investors continue to look for stocks with high short interest that could see short squeezes as prices rise. While Coinbase is not among the most shorted stocks overall yet, the stock is seeing elevated short interest.

A new report from S3 Partners shows that Coinbase’s short interest was around 5% in December and is now around 10%, doubling to start the 2026 year.

The rising short interest comes amid Coinbase stock down 18.3% year-to-date, compared to a 16.7% decline for Bitcoin (CRYPTO: BTC) and a 2.5% decline for the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500 Index.

"The stock shows a strong correlation with Bitcoin (0.60) and Robinhood (0.69), while also maintaining a broader S&P 500 (0.52)," S3 said of Coinbase stock.

S3 calls the company a "high-beta risk asset" given its strong correlation to Bitcoin and the S&P 500. The report also highlights the high volatility of Coinbase stock, which rose 103% last spring and 391% in 2023.

With elevated short interest, the stock is also seeing a higher short-squeeze score. S3 Partners shows a short squeeze score of 82 out of 100 for Coinbase stock.

Coinbase stock also hits a crowded shorts data score of 50 from S3, a new high for the company. The data suggest an "elevated short squeeze risk" for Coinbase stock.

Before investors rush out to pile into Coinbase stock ready for a short squeeze, S3 cautions that the stock saw high short squeeze scores of 70 or more three times in 2025, "but the stock never actually squeezed."

Will a short squeeze score of 82 finally trigger a short squeeze? That's the question for investors to consider going forward.

Coinbase Revenue Falls

Coinbase reported fourth-quarter financials in February. The company missed analyst estimates for revenue, reporting $1.78 billion, down 5% year-over-year.

The company saw transaction revenue decline in the quarter, and several other metrics declined year over year.

Bitcoin and other cryptocurrencies traded lower in the fourth quarter, likely impacting the company’s transaction revenue.

With Bitcoin and other cryptocurrencies falling further in the first quarter, Coinbase’s next financial results could send Its stock lower. This could elevate short interest in the stock and increase the potential for a short squeeze further.

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