- Coinbase announced plans to raise $1 billion through convertible senior notes offering as crypto market recovers from 2022 bear market
- Coinbase stock price jumped over 3% on news, hitting multi-month high this week amid growing optimism about crypto in 2023
- As a crypto exchange, Coinbase benefits from explosive growth of Bitcoin and Ethereum ETFs, acting as custodian and partner for several funds
The leading cryptocurrency exchange in the United States, Coinbase, has announced plans to raise $1 billion through a private offering of convertible senior notes. This comes as the crypto market continues its recovery from a brutal 2022 bear market.
Coinbase Stock Price Jumps on News
Coinbase stock, which trades on the Nasdaq under the ticker COIN, rose over 3% on Tuesday following the announcement. The stock hit a multi-month high earlier this week as optimism grows regarding crypto’s prospects in 2023 and beyond. Over the past month, COIN is up nearly 90%.
How the Convertible Notes Work
The convertible senior notes allow institutional investors to convert the notes into cash or Coinbase stock at maturity in 2030. This gives Coinbase access to capital now while delaying potential dilution of existing shareholders until later.
Following MicroStrategy’s Lead
With this move, Coinbase is following the lead of MicroStrategy, another public company that has raised money through convertible notes to buy more Bitcoin. MicroStrategy remains the largest corporate holder of Bitcoin.
Coinbase’s Role in Crypto ETF Growth
As a crypto exchange, Coinbase is benefitting from the explosive growth of Bitcoin and Ethereum ETFs this year. Coinbase acts as the custodian and surveillance sharing partner for several of these funds. Inflows into the ETFs keep setting new records, now topping $60 billion in assets under management.
The Outlook for Coinbase
With optimism growing for a crypto rebound in 2023, Coinbase is well positioned to benefit through its exchange trading volumes and partnerships with crypto ETF providers. This convertible notes offering gives Coinbase more flexibility as it navigates the volatile cryptocurrency markets.
