“Goldman Sachs managed the sale of the Coinbase bonds“– Paul Ebeling
Junk-bond investors gave cryptocurrencies their biggest endorsement yet as Coinbase Global Inc. (NASDAQ:COIN) sold $2-B of debt.
At least $7-Bof orders poured in allowing the crypto giant to boost the deal’s size from $1.5 to 2-B.
Equal amounts of 7 and 10-yr bonds were sold at interest rates of 3.375% and 3.625%, respectively, lower than the initially discussed borrowing costs.
The warm welcome from fixed-income investors shows that cryptocurrency is no longer a sector reserved for venture-capital funding, as debt investors including pension funds and hedge funds look to get in on the action.
Coinbase, a crypto brokerage and exchange, is earmarking its greater proceeds for general corporate purposes, potentially including product development and takeovers..
Opportunities for growth are manifest as ys of crypto hype is finally and rapidly turning into something resembling mainstream adoption, so paying a little extra to have cash on hand to fuel new initiatives is not a bad idea.
Underscoring the industry’s potential, it emerged Tuesday that Jump Trading Group, one of the world’s biggest traders, has committed billions of dollars in capital to crypto trading and developing software for decentralized finance, or DeFi, a blockchain-fueled corner of crypto that aims to replace convention finance.
Coinbase is a “strong company and a leader in crypto trading, but it’s looking to do more to diversify away from that and DeFi is an area Coinbase is looking at.
The bond offering is a big win for Coinbase as it contends with a toothless warning from the SEC against launching a product that would allow consumers to earn interest on their crypto holdings while they sleep.
Have a prosperous day, Keep the Faith!