Bitcoin has earned the trust of the world’s largest money manager.
Last week, BlackRock announced a partnership with new crypto exchange Coinbase. Now, a week later, the world’s largest asset manager has launched a service to sell the cryptocurrency to U.S. investors.
Coinbase has partnered with BlackRock to offer Bitcoin trading services to clients. The partnership represents a push into cryptocurrencies for the world’s largest asset manager and an endorsement for the embattled crypto exchange.
Investor’s who use BlackRock’s Aladdin investment management platform and are clients of Coinbase will now be able to directly access crypto trading, prime brokerage, and custody services through Coinbase’s institutional arm, Prime.
Coinbase shares soared 16% after the partnership announcement, building on a 20% surge previously in the week. BlackRock stock also traded 0.4% higher after the announcement.
The Bitcoin trust is BlackRock’s first to offer direct exposure to bitcoin and seeks to track the performance of the largest cryptocurrency by market value.
“Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets using our technology and product capabilities,” the BlackRock team said in a website post.
BlackRock said the firm has conducted work in four areas of digital assets and their ecosystems that could benefit the firm’s clients and broader capital markets: permissioned blockchains, stablecoins, crypto assets and tokenization.
June was a brutal month for cryptocurrencies. Bitcoin dropped 37.3% in June alone, giving it the largest fall since 2011. The sell-off was triggered by inflation fears and investors trying to liquidate. The major sell-off caused job cuts in many crypto companies and even forced some lenders to pause withdrawals. Coinbase shares have dropped more than 60% this year due to the tech-stock selloff. In July, Bitcoin and other cryptocurrencies skyrocketed with a major comeback after the large tech-stock selloff.
The partnership also marks a firm push into the digital asset space for one of Wall Street’s biggest players. The crypto market crash has taken some of the hot air out of digital assets, but signs point to the continued grind of institutional adoption and investment in the nascent space, reports Barron’s.
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” says BlackRock’s global head of strategic ecosystem partnerships Joseph Chalom.
