HomeNEWSCoinbase to raise $2bn to bolster investment strategy

Coinbase to raise $2bn to bolster investment strategy

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Coinbase, one of the leading cryptocurrency exchanges, has announced a $2 billion convertible senior notes offering. In a blog post released on Tuesday, the exchange disclosed that the initiative will be a private offering that includes two tranches of $1 billion, with both maturing in 2029 and 2032. 

According to the statement, Coinbase will issue the senior unsecured notes to qualified institutional investors. Addressing questions about the offering’s regulatory standing, the crypto exchange said Rule 144A of the United States Securities and Exchange Commission (SEC) covers the proposal.

Furthermore, the crypto trading platform stated that both series are convertible to cash, Class A common stock, or an offer of both. Coinbase said it holds the final decision on what investors can convert the senior notes to among the aforementioned options. 

The crypto exchange went on to mention that the notes will gain semi-annual interest and attain maturity on October 1 of 2029 and 2032. As of press time, Coinbase has yet to disclose the interest rates, conversion terms, and pricing structure. 

As per the announcement, the senior convertible notes have a $300 million overallotment option for investors. To cover dilution risks, Coinbase indicated that it will initiate capped call transactions to protect the company and investors from any shortcomings during stock conversion. 

Funds may support Coinbase to stockpile more Bitcoin 

Meanwhile, the remaining funds will be allocated to general corporate purposes, which is a strategic broad category that covers working capital, acquisitions, and share buybacks. This move points to a potential push in Coinbase’s Bitcoin acquisition strategy. 

Currently, Coinbase is the 10th largest public company with a Bitcoin stockpile. According to market data, the firm holds 11,776 Bitcoin worth $1.2 billion.  

Within the second quarter of the year alone, the cryptocurrency exchange spent more than $288 million to buy 2,509 Bitcoins. That said, the latest offering signals how firms within the crypto space are exploring options to attract investors from the traditional finance space. 

Still, the initiative indicates that Coinbase is trialing the path of the largest corporate holder of Bitcoin, Strategy, which exposed crypto firms to raising funds from a public stock offering. If true, Coinbase could make history as the first company in the S&P 500 index to buy Bitcoin with proceeds from private note offerings. 

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David Idowu
David Idowu
David Idowu is a crypto reporter and trader with wealthy years of experience. He believes that blockchain technology has numerous opportunities that are begging for proper utilization. Away from work, David is either reading about world politics, history, or tech Innovations.

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