Cryptocurrency News

Coinbase Sells Junk-Bonds Encouraging Crypto Investment

Recognized as a high-tech cryptocurrency exchange trusted by the gen-next investor class from across the globe, Coinbase Global has created a spur in the crypto sphere by selling debt worth $2 billion as part of its Junk-bond sale event. 

The highly-anticipated Junk-bond sales received overwhelming support from the industry, signaling growing investor interest in the crypto domain. With cryptocurrencies becoming the hot-shot solution for traders, there are pretty high chances of the asset class going mainstream. The Coinbase notes sales were managed by Goldman Sachs Group Inc. 

According to the report, the project saw a whopping demand from the market space with orders worth $7 billion pooling on the portal. The response was so encouraging that Coinbase had to increase the size of the deal from $1.5 billion to $2 billion debt. Investors purchased an equal amount of bonds for seven-year and ten-year tenure periods. The seven-year bond was offered at an interest rate of 3.375% while the ten-year bond was released at a 3.625% interest rate. 

For the unversed, Junk bonds are high-yielding securities stuffed with high-risk patterns issued by a firm to raise funds for meeting financial requirements. The unforeseen support given by the fixed-income investor class to Coinbase’s Junk-bond sales is really surprising. Contrary to the traditional belief that considers crypto as a venture-capital funding tool, the recent Junk bonds sale has brought crypto to the mainstream industry. Investors, including pension funds and hedge funds, participated actively in the sale, giving a new shape to the crypto demand culture. 

This is not the first time that crypto-based junk bonds were released in the market. In June this year, software development firm MicroStrategy Inc. sold notes worth $500 million to fuel the purchase of Bitcoin. Coinbase is looking forward to utilizing the funds for fueling its product development initiatives and takeover plans. Talking about the sale, Julie Chariell, an analyst at Bloomberg Intelligence, stated that the step taken by Coinbase is likely to trigger other exchange portals to sell debt. 

The newly-released debts were rated one point below investment-grade assets. The coming years are likely to belong to crypto as the latter is earning constant support from the big fishes of the finance and industrial sector. The Jump Trading Group, which serves as one of the world’s biggest traders, has recently decided to invest a hefty amount of capital into crypto trading and DeFi software development projects.

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