Coinbase Seeks to Benefit from Bitcoin Rally, Plans to Raise $1 Billion Through Convertible Debt Offering

Coinbase Global (COIN) is looking to capitalize on this year’s robust crypto market upswing by raising $1 billion through the issuance of senior convertible notes.

Aimed at institutional buyers in a non-public sale, these notes are slated for maturity in 2030, as disclosed by America’s chief and solitary publicly traded crypto exchange this past Tuesday.

With cryptocurrency varieties like bitcoin witnessing a significant surge in the initial quarter of 2024, and as avenues for investing in these digital assets expand, bitcoin has consistently set new record prices by recently eclipsing the $72,000 mark earlier in the week.

Coinbase intends to allocate the procured $1 billion toward debt settlements, considering buybacks of earlier convertible note issues, alongside other standard corporate uses.

Convertible notes are a prevalent funding mechanism, offering companies the chance for immediate capital infusion without imminent equity relinquishment or diluting the stake of existing shareholders, by selecting a future point for notes conversion to cash or company shares.

Often chosen during bull markets when investors are upbeat, these financial instruments prevent immediate share dilution that could negatively impact stock value.

As of Wednesday at 12:30 p.m. ET, Coinbase’s share price rose to $263.51, nearly a 3% increase. Year-to-date, the figure marks an ascension of 50%, while it approaches 400% over the past year.