Coinbase and BlackRock have partnered to offer cryptocurrencies to a larger client base.
Cryptocurrency exchange platform Coinbase has partnered with multinational investment management corporation 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 earlier in the week. BlackRock stock also traded 0.4% higher after the announcement.
“Coinbase Prime integrates advanced agency trading, custody, prime financing, staking, and staking infrastructure, data, and reporting that supports the entire transaction lifecycle,” say Coinbase’s Brett Tejpaul and Greg Tusar in a joint statement. “The Coinbase partnership between BlackRock and Aladdin is an exciting milestone for our firm.”
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.