Coinbase And MicroStrategy Bonds Fall Due To FTX Collapse
Bonds issued by cryptocurrency exchange Coinbase (COIN) and MicroStrategy (MSTR), a business intelligence firm and bitcoin investor, have plummeted as investor trust in the industry has plummeted in the aftermath of FTX’s demise.
According to data provider Finra-Morningstar, Coinbase‘s bond due 2031 has plunged 15% this month to 50 US cents on the dollar, driving the yield – which moves in the opposite direction of price – to a record high 13.5%. The drop comes after nearly three months of consolidation and extends the FTX events that began earlier this year. The yield on the company’s 2026 bond has risen to 17%.
Bonds associated with MicroStrategy, a business intelligence firm and bitcoin holder, have taken a similar hit due to the collapse of FTX. The interest on the company’s 2028 notes, which were issued last year to finance bitcoin (BTC) accumulation, increased to 13.35% on Friday as the price fell to a record 72.5 cents on the dollar. On its balance sheet, MicroStrategy has around 130,000 BTC worth approximately $2.08 billion.
The debt of the corporations carries a premium of roughly 1,000 basis points, or higher, over the 10-year Treasury note rate as of Friday. A premium of that size is considered to signify credit stress in traditional markets. At the time of publication, the 10-year Treasury yielded 3.8%. One percentage point equals one hundred basis points.
“High bond yields reflect sharply higher rates, but also genuine skepticism about crypto’s long-term viability among institutional investors following the high-profile collapses of Terra Luna, Celsius, 3AC, Voyager, BlockFi, and FTX,” Mike Alfred, a value investor and founder of digital assets investment platform Eaglebrook Advisors, said.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Chubbi
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Coinbase And MicroStrategy Bonds Fall Due To FTX Collapse
Bonds issued by cryptocurrency exchange Coinbase (COIN) and MicroStrategy (MSTR), a business intelligence firm and bitcoin investor, have plummeted as investor trust in the industry has plummeted in the aftermath of FTX’s demise.
According to data provider Finra-Morningstar, Coinbase‘s bond due 2031 has plunged 15% this month to 50 US cents on the dollar, driving the yield – which moves in the opposite direction of price – to a record high 13.5%. The drop comes after nearly three months of consolidation and extends the FTX events that began earlier this year. The yield on the company’s 2026 bond has risen to 17%.
Bonds associated with MicroStrategy, a business intelligence firm and bitcoin holder, have taken a similar hit due to the collapse of FTX. The interest on the company’s 2028 notes, which were issued last year to finance bitcoin (BTC) accumulation, increased to 13.35% on Friday as the price fell to a record 72.5 cents on the dollar. On its balance sheet, MicroStrategy has around 130,000 BTC worth approximately $2.08 billion.
The debt of the corporations carries a premium of roughly 1,000 basis points, or higher, over the 10-year Treasury note rate as of Friday. A premium of that size is considered to signify credit stress in traditional markets. At the time of publication, the 10-year Treasury yielded 3.8%. One percentage point equals one hundred basis points.
“High bond yields reflect sharply higher rates, but also genuine skepticism about crypto’s long-term viability among institutional investors following the high-profile collapses of Terra Luna, Celsius, 3AC, Voyager, BlockFi, and FTX,” Mike Alfred, a value investor and founder of digital assets investment platform Eaglebrook Advisors, said.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Chubbi
Coincu News
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