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Blackrock, one of the world’s largest asset management firms, is partnering with Coinbase to provide investors with crypto investing capabilities.
Through connectivity with Coinbase Prime, institutional clients of Aladdin, BlackRock’s end-to-end investment management platform, will have direct access to cryptocurrencies, starting with bitcoin.
Coinbase announced the partnership on 4 August, and shares of Coinbase stock jumped 10 percent on the news, according to CNBC.
The CNBC report actually noted that the Coinbase stock price was already rising before the news.
“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,” said Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock, according to a Coinbase blog post. “This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”
Aladdin’s institutional clientele will get access to crypto trading, custody, prime brokerage, and reporting tools via Coinbase Prime.
The Coinbase exchange represents a superior fit for institutional grade investing, said Brett Tejpaul, Head of Coinbase Institutional and Greg Tusar, Vice President, Institutional Product, since the platform has cutting-edge security, insurance, and compliance processes. Hedge funds, asset allocators, financial institutions, corporate treasuries, and other institutions are some of Coinbase’s clientele.
Positive News For Coinbase and The Crypto Sector
The announcement represents a positive turn for Coinbase, in the wake of a recent insider scandal involving an employee who gave info to a friend and family member regarding crypto tokens that were about to be newly listed on the exchange.
Typically, new listings on major exchanges often result in a price boost for the listed tokens.
The SEC has filed a suit over the matter, while muddying the central issue by using the suit to allege that various cryptos listed on Coinbase should be classed as securities.
The Trends Journal has previously covered details of that story in “SEC REBUKED FOR ‘REGULATION BY ENFORCEMENT’ BY CFTC COMMISSIONER” (2 Aug 2022).
Some industry observers said the latest news, since it involves one of the largest institutional investment companies in the world, could contribute to a turn around in the crypto sector, which saw steep declines in early 2022, earning the “Crypto Winter” label.
The Quartz crypto news outlet (qz.com) noted that Blackrock’s move marks a significant revision in CEO Larry Fink’s earlier assessments of the crypto sector.
During the Crypto banner runs of 2021, Fink claimed Blackrock clients were not showing much interest in digital assets.
But Fink opined earlier this year that Russia’s invasion of Ukraine was accelerating demand for cryptocurrencies like Bitcoin.