Leading U.S.-based cryptocurrency exchange Coinbase has seen enormous demand for its junk bond offering, with the firm increasing the size of the sale by one-third from $1.5 billion to $2 billion.

According to Economic Times, at least $7 billion worth of orders were placed in competition for equal quantities of seven and 10-year bonds, offering interest rates of 3.375% and 3.625% respectively.

The publication cites an anonymous source as claiming the interest rates were cheaper than the initial quotes offered by Coinbase, with the influx of demand suggesting buyers hold a higher opinion of the company’s credit-worthiness than initially suspected by the exchange.

“The strong demand is clearly a big endorsement by debt investors,” commented Bloomberg Intelligence analyst Julie Chariell.

However, the exchange’s bonds were rated one rank below investment-grade, with Bloomberg bond indexes indicating that similar debt offerings fetch a 2.86% yield on average.

Junk bonds refer to corporate debt issued by a company that does not have an investment-grade credit rating. Due to the reduced credit rating, junk bonds command higher interest rates than investment-grade corporate bonds.

Coinbase announced its debt offering on Sept. 13, stating the funds may be used for “continued investments in product developments” and “potential investments in or acquisitions of other companies, products, or technologies” the firm may identify in the future.

Coinbase is only the second major crypto firm to complete a junk bond offering, with MicroStrategy Inc. issuing $500 million worth of notes to fund further Bitcoin accumulation as the markets crashed in June.

Since trading as high as $342 on its opening day, Coinbase’s COIN stock last traded for $243. However, COIN is up roughly 20% since late June.

The recently bullish investor sentiment surrounding Coinbase comes in spite of the U.S. Securities and Exchange Commission (SEC) threatening to take legal action against the exchange should it launch a USDC lending product.

Prior to the SEC’s warning, the exchange had intended to launch its crypto lending product ‘Lend’ in only “a few weeks.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: BTC shows weakness, bears aiming for $90,000 mark

Bitcoin Weekly Forecast: BTC shows weakness, bears aiming for $90,000 mark

Bitcoin (BTC) price hovers around $97,000 on Friday after losing nearly 5% in the last three days. CryptoQuant weekly report shows that activity on the Bitcoin network has declined to its lowest level in a year. 

More Bitcoin News
ONDO Price Forecast: Ondo Chain launched while TVL rises to $654 million

ONDO Price Forecast: Ondo Chain launched while TVL rises to $654 million

Ondo price is nearing its key weekly resistance of $1.38 on Friday, and a firm close above this level hints at a rally ahead. Ondo launches its Ondo Chain, a new Layer 1 blockchain purpose-built for institutional-grade RWAs.

More Ondo News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP are at risk of for further declines

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP are at risk of for further declines

Bitcoin (BTC) hovers around $97,400 on Friday after losing nearly 5% in the last three days. Ethereum (ETH) and Ripple (XRP) fail to recover and face rejection from their key levels, hinting at further corrections.

More Cryptocurrencies News
XRP ETF gains traction as SEC acknowledges Grayscale filing for Solana and Litecoin funds

XRP ETF gains traction as SEC acknowledges Grayscale filing for Solana and Litecoin funds

Ripple's XRP was in the limelight on Thursday following the Chicago Board Options Exchange (Cboe) 19b-4 filing to the SEC to list and begin trading XRP exchange-traded funds (ETFs) for asset managers Canary Capital, WisdomTree, 21Shares and Bitwise. 

More Ripple News
Bitcoin: BTC shows weakness, bears aiming for $90,000 mark

Bitcoin: BTC shows weakness, bears aiming for $90,000 mark

Bitcoin (BTC) price hovers around $97,000 on Friday after losing nearly 5% in the last three days. CryptoQuant weekly report shows that activity on the Bitcoin network has declined to its lowest level in a year. Traders should watch FTX's upcoming repayments to creditors starting on February 18, which could bring in volatility for Bitcoin prices.

Read full analysis
The Best Brokers of the Year

The Best Brokers of the Year

SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.

Read More

BTC

ETH

XRP