Cryptocurrency exchange Coinbase Inc. said Tuesday it plans to raise $2 billion through a private offering of convertible senior notes, signaling one of the largest debt financings in the crypto industry amid a broader downturn in trading activity.
The offering, targeting qualified institutional buyers under Rule 144A of the Securities Act, will be issued in two tranches of $1 billion each, maturing in October 2029 and October 2032. The notes will be unsecured and will bear interest payable semi-annually. Final pricing and conversion terms will be determined at the time of sale, according to Coinbase’s investor announcement.
Coinbase said it may offer an additional $150 million in each tranche to initial purchasers if demand warrants. The proceeds will be used for capped call transactions to mitigate dilution and for general corporate purposes, including potential debt refinancing, acquisitions, working capital, and share repurchases.
The company’s stock tumbled more than 5% on the announcement, with weekly losses nearing 20% as investors reacted to concerns over dilution and weak quarterly results. Shares of Coinbase, traded under the ticker COIN, have faced pressure in recent weeks amid declining trading volumes and continued regulatory uncertainty in the U.S.
Revenue for the second quarter fell to approximately $1.5 billion, down 26% from the previous quarter, despite a modest year-over-year increase. The drop reflects cooling interest in digital asset trading after a brief resurgence earlier this year.
To limit shareholder dilution, Coinbase will enter into capped call transactions with financial institutions, allowing the company to offset potential equity conversion impacts if its stock rises above a predetermined cap.
Analyst opinions were mixed. While firms like Benchmark maintained a bullish stance on Coinbase’s long-term growth potential, others such as Mizuho and Compass Point trimmed their price targets to $267 and $238, respectively, citing concerns over the company’s near-term fundamentals.
Coinbase last issued convertible notes in 2021 and 2026, which are also candidates for refinancing with the proceeds from this latest offering.
The offering marks a strategic shift toward liquidity preservation as the company navigates a more volatile crypto market and prepares for a potential rebound in institutional trading.
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