- Coinbase to raise $2B via convertible notes targeting institutional buyers under Rule 144A.
- Funds may support buybacks, acquisitions, and possibly further Bitcoin accumulation.
- COIN shares dropped 15% after Q2 results showed declining revenue and rising expenses.
Coinbase has announced a proposal to raise up to $2 billion by offering convertible senior notes to qualified institutional investors. The deal includes two tranches of $1 billion, which will mature in 2029 and 2032. According to Coinbase, the two tranches will be senior, unsecured obligations, and interest will be accrued semi-annually. The notes may be converted into cash, Coinbase Class A common stock, or a combination of both, depending on the company’s election.
Coinbase intends to grant initial purchasers the option to buy up to an additional $150 million in each tranche, potentially bringing the total offering to $2.3 billion. The convertible notes are being issued under Rule 144A of the U.S. Securities Act, which limits the buyers to institutional investors. Final pricing details, including interest rates and conversion ratios, will be determined at a later stage.
Coinbase also plans to enter into capped call transactions for both tranches. These will minimize the possible dilution to shareholders when the notes are converted and will offset cash payments exceeding the principal amount. The counterparties of the capped calls can also participate in hedging operations by trading Coinbase shares and derivatives.
The fundraising model is part of a wider industry trend with multiple crypto-native businesses utilizing convertible note offerings to access their traditional capital markets. Both Strategy and Marathon Digital Holdings recently issued similar instruments to enhance balance sheet flexibility and maintain investor confidence.
Proceeds to Support Strategic Initiatives, Potential Bitcoin Purchases
Coinbase added that the capped call transactions will be funded out of the net proceeds of the offering and used for general corporate purposes. These include working capital, capital expenditures, potential acquisitions, and share buybacks. Although the company has not confirmed any immediate plans to buy digital assets, the proceeds could also support further Bitcoin acquisitions.
In Q2 of 2025, Coinbase bought 2,509 Bitcoin valued at more than $280 million, bringing its total holdings to 11,776 BTC. According to BitcoinTreasuries.net, Coinbase is the 10th-largest publicly known holder of Bitcoin, ahead of Tesla in terms of coin count. The company’s strategy mirrors moves by Strategy, which has used note offerings to purchase Bitcoin and expand its crypto treasury.
Should Coinbase use part of the proceeds toward purchasing more Bitcoin, it would represent a massive capital allocation shift by a publicly traded S&P 500 company. The transition may also show growing institutional recognition of digital currencies and strengthen Coinbase’s leadership in the cryptocurrency trade.
Related: Coinbase and PayPal Navigate GENIUS Act With “Reward” Loophole on Stablecoins
Offering Follows Weak Q2 Earnings and Share Price Decline
The announcement by Coinbase comes after it posted its Q2 2025 earnings, in which revenue declined and the cost of operations rose. The company reported $1.5 billion in total revenue, with transaction revenue falling to $764 million below market expectations. Subscription and services revenue grew modestly to $655.8 million, up 9% from the previous quarter.
Retail trading volumes reached $43 billion, significantly underperforming Wall Street’s $48 billion forecast. Analysts also cited margin pressure in Coinbase’s collaboration with Circle, especially in terms of revenue-sharing from USDC reserves. Coinbase’s share price declined by over 15% on August 4, after the earnings report was released.
Issuing a convertible note is driven by a need to strengthen liquidity and have strategic flexibility amid market uncertainty. The use of capped calls also demonstrates that Coinbase is aiming to reduce dilution, address potential investor concerns, and continue to explore long-term growth opportunities.
