Coinbase Bond Rebounds
Coinbase’s convertible bond has seen a significant recovery as Bitcoin prices soar. The bond, which allows investors to convert it into Coinbase shares, had declined in value as the underlying stock struggled. However, the recent rally in cryptocurrencies has boosted the bond’s value, with its cash price reaching a two-year high.
AI Sector Drives Convertible Bond Demand
The resurgence in Coinbase’s bond reflects a broader increase in demand for convertible bonds, particularly in the artificial intelligence (AI) sector. Some AI companies have successfully issued bonds without any interest payments (coupons).
MicroStrategy and DigitalOcean Lead Crypto-Backed Bonds
In the crypto space, MicroStrategy has raised funds for Bitcoin purchases through a $700 million convertible bond with a low coupon rate. DigitalOcean’s bonds are also trading at their highest level since early 2022.
SEC Delays ETF Decision
Grayscale has requested the SEC to allow options trading on its Bitcoin ETF, arguing that it would increase accessibility for investors. However, the SEC has extended the decision timeline, citing the need for further consideration.
Grayscale Argues for Consistency
Grayscale CEO Michael Sonnenshein has criticized the SEC’s decision, arguing that it discriminates against GBTC shareholders. He points out that the SEC has approved options on ETFs linked to Bitcoin futures, but not on ETFs that hold Bitcoin directly.
Deadline for SEC Decision
The SEC has set a deadline of April 24, 2024, to approve or disapprove the proposed rule change for spot Bitcoin ETF options. Grayscale maintains that the SEC should treat investment products related to Bitcoin consistently and provide regulatory clarity in the cryptocurrency space.
