Hedge Fund Tiger Global Plotting $500 Million Coinbase Investment

Coinbase capital base is on the verge of receiving a significant boost. Immediate reports indicate that U.K Hedge Fund, Tiger Global, is considering a $500 million investment in the U.S-based Cryptocurrency Exchange.

According to people with knowledge of the matter, Coinbase is to add $250 million of its own money to coffers. In addition, as much as $250 million will go towards buying out existing investors as part of the deal.  Talk of Tiger Global investments talk also comes at a time when Coinbase is reportedly planning to carry out an Initial Public Offering.

The Investment if finalized would catapult the exchange valuation to about $8 billion. Such an investment would strengthen the U.S-based cryptocurrency exchange prospects in the sector.  The investment would see Coinbase rise up the ranks to become the most valuable startup.

Talk of possible investment from Tiger Global comes at a time when Coinbase has taken a substantial beating in the market. The crypto exchange has lost a substantial amount of market value in the wake of cryptocurrencies price implosion.

An $8 billion valuation would make a lot of sense given that the company is down from its peak market value. In addition, the company did value itself at $8 billion in April as it pitched an investment to Earn.com investors.  Despite its market value talking a beating in recent months, Coinbase remains profitable. Executives have in the recent past reiterated that they are not fixated on the monetary peaks and valleys.

The executives did open talks with investors, a while back, about a possible secondary stock sale. The stock sale would have allowed the company to cash out existing investors without raising new funds. Reports indicate that interest was so high at the time, for the cash out, that the company had to issue stern warnings to dealmakers.

Tiger Global is an investment firm that pursues deals on consumer-facing brands around the world.   The firm’s interest in Coinbase does not come as a surprise given the credibility the firm commands in the cryptocurrency space. Being the largest cryptocurrency exchange in the U.S the crypto firm boasts of a competitive edge that could work to its advantage going forward.

Cryptocurrencies have already started showing signs of rebounding after this year’s sell-off. What this means is that Tiger Global stand a higher chance of gaining big on a cryptocurrency meteoric rise as experienced last year.