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Coinbase Debt Was ‘Canary in the Coal Mine’ for Crypto Meltdown

  • Trading platform has $5.4 billion of liquidity, says BI
  • Bond prices reflect ‘the fear that has engulfed crypto’
Coinbase Releases Third-Quarter Financial Results
Photographer: Leon Neal/Getty Images Europe
Updated on

In the wake of the spectacular meltdown of Sam Bankman-Fried’s crypto empire, many investors are looking for early warning signs that may have foretold the contagion that was about to unfold. One possibility? Coinbase Global Inc.’s junk bonds.

The largest US digital-asset trading platform has seen the price of its bonds plunge this year. In early January, the price for one of its most active notes was at about 92 cents. It then slid to about 77 cents in April before dropping to 63 cents amid the Terra Luna market crash in May. The bonds traded around 53 cents on the dollar -- a level typically associated with distressed -- in early morning trading in New York Wednesday, according to Trace bond trading data.