After selling $ 2 billion of debt in the form of junk bonds to a series of institutional investors, the US exchange Coinbase has shown that there is a "strong demand" from the share. of these institutions for exposure to the crypto space.
Investor demand for debt was much higher than supply, with at least $ 7 billion in orders for the $ 2 billion in debt to sell, Bloomberg reported, citing an anonymous source "familiar with the matter."
For Bloomberg Intelligence analyst Julie Chariell , the success of this sale is a signal of "investor approval" which clearly proves the existence of "strong demand" for this type of debt in the bond market. Separately, Chariell also called Coinbase a “leader in crypto-trading,” and noted that the company has taken steps to diversify away from trading alone, which it says “can be a volatile business. "
The seven- and ten-year bonds offered by the exchange were sold with interest rates of 3.375% and 3.625%, respectively.
Debt was ranked a notch below the "investment" category, with bonds of the same category having an average interest rate of 2.86%, according to Bloomberg. However, the rate Coinbase obtained is still lower than the borrowing costs initially discussed between the exchange and its financial advisers, according to the article.
Commenting on the deal, Zhu Su , CEO of Three Arrows Capital , believes the successful bond sale could trigger a "supercycle," likely referring to the theory that digital asset prices will continue to rise without a market. looming short-term bearish.
Separately, the financial rating agency Moody's wrote in an article published yesterday that Coinbase continues to maintain "strong finances" and a "very profitable market position in the digital asset sector."
“Coinbase stands out as a reliable and trusted platform, with a diverse product offering that has garnered 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, claiming that "regulatory and operational risks are abundant" in the crypto industry, which is why Coinbase has "invested heavily in its compliance and monitoring programs. transactions".
Shares of Coinbase, whose ticker code is COIN, have been trading largely lower since last Tuesday, when the stock price fell alongside the crypto market as a whole. The price rose only 0.07% on Tuesday, closing the day at $ 243 per share.
Post a Comment