Coinbase to Raise $2 Billion via Convertible Notes Amid Market Volatility

Coinbase Global, Inc. (Nasdaq: COIN) has announced a private offering of $2 billion in convertible senior notes, split into two tranches—$1 billion each—maturing in 2029 and 2032 [1]. The offering, directed at qualified institutional buyers under Rule 144A, includes notes that will be senior, unsecured obligations with semi-annual interest payments and conversion rights into cash, shares of Coinbase’s Class A common stock, or a combination of the two [2]. The conversion premiums for the tranches are set at 50–55% for the 2029 notes and 30–35% for the 2032 notes [1].

The company has also granted the initial purchasers the right to purchase an additional $150 million principal amount of each tranche, subject to market conditions [2]. A portion of the net proceeds will be used to pay for privately negotiated capped call transactions, which aim to reduce dilution from note conversions and offset any cash payments exceeding the principal amount of the converted notes [2]. These transactions are typically structured with the initial purchasers or their affiliates and are designed to hedge against stock price volatility.

The remaining proceeds will be allocated toward general corporate purposes, including working capital, capital expenditures, potential acquisitions, repurchases of Class A common stock, and the repayment of existing debt obligations such as the company’s Convertible Senior Notes due 2026 and Senior Notes due 2028, 2030, and 2031 [2]. Coinbase emphasized that the offering remains subject to market conditions and regulatory approvals, and neither the notes nor any shares issuable upon conversion are registered under the Securities Act or any other securities laws [2].

Following the announcement, Coinbase’s stock price declined, reflecting investor concerns about increased leverage and potential dilution [6]. Some market observers suggest that the offering reflects broader capital-raising trends in the crypto sector amid a challenging macroeconomic environment [7]. Analysts have highlighted the strategic implications of the move, noting that the proceeds could be used to strengthen Coinbase’s infrastructure, accelerate product development, or expand its market reach [8]. The offering marks a return to the capital markets for the company after several years, signaling confidence in its long-term growth strategy.

Coinbase’s financial strategy is intended to enhance corporate flexibility without directly influencing cryptocurrency acquisitions, according to the company’s statement [2]. The offering aligns with historical strategies employed by major tech companies and adheres to SEC-compliant practices. Forward-looking statements include the expected completion of the offering, the granting of additional purchase options, and the anticipated use of proceeds. These statements are subject to risks and uncertainties, including market conditions, regulatory developments, and the effectiveness of hedging transactions [2].

Coinbase has disclaimed any obligation to update these statements after the date of the announcement [2].

Sources:

[1] Coinbase Just Dropped a $2 Billion Bomb – Yahoo Finance (https://finance.yahoo.com/news/coinbase-just-dropped-2-billion-183545695.html)

[2] Coinbase Announces Proposed Private Offering of $2.0 Billion of Convertible Senior Notes – BusinessWire (https://www.businesswire.com/news/home/20250804782790/en/Coinbase-Announces-Proposed-Private-Offering-of-%242.0-Billion-of-Convertible-Senior-Notes)

[3] Coinbase (COIN) Plans to Raise $2B in Convertible Debt – TipRanks (https://www.tipranks.com/news/coinbase-plans-to-raise-2b-in-convertible-debt-amid-strong-investor-interest)

[4] Coinbase Stock Is Falling After $2 Billion Debt Offering – Barrons (https://www.barrons.com/articles/coinbase-stock-coin-debt-offering-8120241d)

[5] Coinbase shares fall after $2 billion convertible notes offering – Investing.com (https://www.investing.com/news/stock-market-news/coinbase-shares-fall-after-2-billion-convertible-notes-offering-4169844)

[6] Coinbase Plans $2 Billion Private Convertible Note – MitTrade (https://www.mitrade.com/insights/news/live-news/article-3-1015031-20250806)

[7] Coinbase plans $2bn debt raise four years after previous – DL News (https://www.dlnews.com/articles/markets/coinbase-plans-debt-raise-four-years-after-previous-offering/)

[8] Coinbase Plans $2B Private Note Sale to Boost Expansion – CoinCentral (https://coincentral.com/coinbase-plans-2b-private-note-sale-to-boost-expansion-strategy/)