Coinbase’s Junk Bonds Success an ‘Endorsement’ by Institutions

Coinbase Exchange Investing
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Last updated:
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Author
Fredrik Vold
Author Categories
About Author

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more
Source: AdobeStock/photo_gonzo

After selling off USD 2bn of debt in the form of junk bonds to a range of institutional investors, the US-based crypto exchange Coinbase has shown that “strong demand” exists among financial institutions to get exposure to the crypto space.

Demand among debt investors was much higher than what could be met, with at least USD 7bn of orders pouring in for the USD 2bn of debt for sale, Bloomberg reported, citing one unnamed source “with knowledge on the matter. 

Julie Chariell, a Bloomberg Intelligence analyst, called the successful sale “a big endorsement by debt investors” that clearly shows that “strong demand” exist for this type of debt in the bond market. Moreover, she also called Coinbase “a leader in crypto trading,” but noted that the company has taken steps to diversify away from just trading, which she said “can be a volatile business.”

The seven- and 10-year bonds offered by the exchange were sold with interest rates of 3.375% and 3.625%, respectively.

The debt was graded as one step below “investment grade,” with similarly graded bonds having a 2.86% interest on average, according to Bloomberg. However, the rate Coinbase got is still lower than the borrowing costs originally discussed between the exchange and its financial advisors, per the report.

Commenting on the deal, Zhu Su, CEO of Three Arrows Capital, called the successful bond sale a “huge endorsement of supercycle,” likely referring to the theory that digital asset prices will continue to rise without an impending bear market in the near term.

Meanwhile, financial ratings agency Moody’s wrote in a report released yesterday that Coinbase continues to maintain “strong finances” and a “highly profitable market position in digital assets.” 

“Its platform stands out as a reliable and trusted digital asset venue, with a diverse product offering that has reaped an 11% market share of crypto assets, 68 million active users and very strong recent profitability,” Moody’s said.

However, the agency also added a word of caution, saying that “regulatory and operational risks are abundant” in the crypto sector, which is why Coinbase has “invested extensively in its compliance and trade surveillance programs” to help it stay compliant.

Shares of Coinbase, with the ticker code COIN, have traded largely lower since last Tuesday, when the share price fell along with the broader crypto market. The price was up a mere 0.07% for the day on Tuesday, closing the day at USD 243 a share.
___
Learn more: 
Coinbase Pro Accidentally ‘Re-Lists’ XRP Amid Spat with SEC 
Coinbase vs. ‘Sketchy’ SEC Case Reminds of Crypto Regulation Challenges 

Coinbase Plans to Spend More of its Cash on Crypto After USD 500M Buy 
Coinbase Plans to Spur ‘Commerce’-based Crypto Usage for Customers, Merchants 

More Articles

Bitcoin News
Poland’s Central Bank Rejects Bitcoin for Reserves, Citing Security Concerns: Report
Hassan Shittu
Hassan Shittu
2025-02-07 19:51:20
Altcoin News
Ethereum Price Stagnation Conditions, When Is a Pump Coming?
Joel Frank
Joel Frank
2025-02-07 19:22:39
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors