U.S. cryptocurrency exchange Coinbase has sold $2 billion worth of debt via junk bonds, up from an initial target of $1.5 billion due to strong market interest.
The move highlights crypto’s evolution from a fringe asset class to one under the spotlight of mainstream financial types.
“The strong demand is clearly a big endorsement by debt investors,” Julie Chariell, an analyst at Bloomberg Intelligence, told Bloomberg.
A junk bond is a high-yield, high-risk financial security offered by a company and provides investors with a means of investing in debt. A company generally issues junk bonds as a way to raise capital quickly.
The company said it plans to use the net proceeds from the offering for “general corporate purposes, which may include continued investments in its product development, as well as potential investments in or acquisitions of other companies, products or technologies that Coinbase may identify in the future.”
Equal amounts of seven and 10-year bonds were sold at interest rates of 3.375% and 3.625%, respectively, and the offering is expected to close on Sept. 17.
The exchange joins Michael Saylor’s MicroStrategy, which sold $500 million worth of bonds in June to fund its bitcoin purchases.
Coinbase went public via a direct listing on the Nasdaq exchange in April, demonstrating legitimacy to traditional investors that crypto was beginning to evolve beyond its reputation of being a retail play.
Shares in Coinbase (Nasdaq: COIN) rose above $429 shortly after its Nasdaq debut, but prices are currently down 43% and changing hands for around $243.
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