November 22 (Reuters) – Coinbase Global’s (COIN.O) bonds fell sharply and its shares hit record highs as investors dumped the crypto after rival FTX collapsed earlier this month.
The crypto exchange’s rating due in 2031 was trading 51 cents on the dollar on Tuesday, down from its August high of 68.50, with yields – which trade inversely to price – jumping to 13.1%, according to Refinitiv data.
At the start of 2022, these notes were trading closer to 93 cents on the dollar.
By comparison, the yield on 10-year US Treasury bonds was trading around 3.806%.
The surge in Coinbase’s yield and its growing premium to the corresponding 10-year US Treasury yield indicated that investors are increasingly concerned about the creditworthiness of the crypto exchange.
Coinbase’s 2026 note yield was 15.52%, after hitting a record high of 15.78% on Friday.
Moody’s Investors Service said Monday it had placed the Coinbase family of companies’ rating, currently at Ba3, under review for downgrade.
A rating of Baa3 and below is considered “junk” and highly speculative territory. Coinbase is ranked a notch lower.
Moody’s said the collapse of FTX has increased the level of uncertainty in the crypto industry, raising challenges for everyone operating in the sector.
The crypto exchange should see “a growing possibility of sustained reductions in trading volumes and customer engagement, which are significant drivers of Coinbase’s revenue,” said Moody’s vice president and principal analyst Fadi. Abdel Massih.
Shares of Coinbase have lost nearly 38% in value this month and closed at a record low of $41.23 on Monday. Their value is about a tenth of the level when they listed on the New York stock exchange in April 2021.
Reporting by Medha Singh in Bengaluru and Chiara Elisei in London; Editing by Amanda Cooper and Barbara Lewis
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