Experts wonder if this big partnership can pull Coinbase out of a crypto slump.
Analysts are watching the BlackRock-Coinbase partnership and wondering if it could help pull the crypto giant out of a slump.
In August, Coinbase and BlackRock partnered to offer cryptocurrencies to a larger client base. Coinbase is a cryptocurrency exchange platform and BlackRock is a multinational investment management corporation.
The partnership represents a push into cryptocurrencies for the world’s largest asset manager and an endorsement for the embattled crypto exchange. Later in the month, BlackRock launched a service to sell Bitcoin directly to U.S. investors.
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.
Why it’s news
Cryptocurrencies have hit a big slump in the last few months.
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.
Coinbase suffered a $1.1 billion loss for the second quarter amid the big crypto market slump. The company’s shares have fallen more than 70% this year, and it is facing some scrutiny.
Considering the big jump in shares after the announcement of the partnership investors are seemingly hopeful that it could bring Coinbase out of its slump.