Coinbase Global Inc (NASDAQ:COIN), one of the world’s largest crypto exchanges, is planning on raising US$1 billion through convertible bonds, echoing a similar strategy to bitcoin holder MicroStrategy.
Unsecured convertible senior notes will be offered via a private offering and will be available to be turned into shares in 2030, the listed group revealed.
Its decision to issue a bond sale rather than shares highlights the group’s desire to avoid diluting current shareholders.
Michael Saylor’s MicroStrategy Incorporated (NASDAQ:MSTR), which owns around US$15 billion of Bitcoin, funded much of the crypto purchase through the sale of more than US$2 billion of convertible notes.
In March, MicroStrategy launched a US$600 million bond sale, but as demand was greater than expected, this figure ended up reaching US$700 million.
Coinbase has also added “negotiated capped call transactions” to reduce the dilution once the debt is transferred to equity, a strategy not used by MicroStrategy in its sales.
“The capped call transactions will cover, subject to customary adjustments, the number of shares of Coinbase's Class A common stock that will initially underlie the notes," the crypto exchange said.
This week both Coinbase and MicroStrategy shares have rallied as bitcoin continued to hit new all-time highs.
Bitcoin’s historic rally extended on Wednesday after it added another 2.8% against the US dollar.
It brings the BTC/USD pair above $73,000 for the first time in the world’s largest cryptocurrency’s 15-year lifespan.
Shares in Coinbase are up 12% in the last five days and have rallied more than 63% since the turn of the year.