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Coinbase Stock Climbs On Blackrock Partnership

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Updated 5 Aug 2022

Key points:

  • BlackRock (BLK) and Coinbase (COIN) Strike Deal
  • Partnership To Start With Bitcoin (BTC)
  • SEC Probe of Coinbase Apparently Not An Issue

The world’s largest cryptocurrency exchange, Coinbase (COIN), announced a partnership with the world's largest asset manager, BlackRock Inc (BLK), on Thursday. This sent COIN shares rocketing higher in reaction to the deal that will make it easier for institutional investors to manage and trade Bitcoin. This is in the wake of the SEC probe of Coinbase with respect to allowing Americans to trade digital assets that the Securers and Exchange Commission (SEC) feels should have been registered as securities.

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BlackRock (BLK) and Coinbase (COIN) Strike Deal

Coinbase Global Inc announced a deal on Thursday with the esteemed multinational asset manager BlackRock to help institutional investors manage and trade Bitcoin. This development is another sign of how a growing number of traditional investors and investment managers are immersing themselves in cryptocurrency markets. This venture will allow the New York-based asset manager’s clients access to digital asset markets.

Source: IG

Also Read: Can Ethereum and Bitcoin Solve Their Energy Use Problem

The stock leapt up to 44% after the announcement, closing out Thursday’s session up 10%. This is a welcome respite with COIN still down nearly 65% on the year at Thursday’s close, having been down over 83% on the year at its low in May.

From a technical analysis perspective, yesterday’s leap higher built on the advance from late June and has minimally secured a short-term base, with threat for an intermediate-term recovery phase through the summer, Q3 and into year-end.

Coinbase’s earnings are due to be released on 9th August.

Partnership To Start With Bitcoin (BTC)

The partnership will see Coinbase initially offer the trading of Bitcoin (BTC) to specific BlackRock customers. The venture will connect the crypto exchange’s Coinbase Prime, which is a custody and trading service (with over 13,000 institutional clients), to BlackRock’s Aladdin, their proprietary investment software.

Joseph Chalom, who is BlackRock’s global head of strategic ecosystem partnerships, said, “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., adding “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.”

SEC Probe of Coinbase Apparently Not An Issue

This news comes as a welcome respite, after the recently surfaced probe by the SEC of Coinbase, as we featured in our recent post SEC To Probe Coinbase On Crypto Listings. The US regulator is looking into whether Coinbase incorrectly allowed Americans to trade digital assets that should have been registered as securities. BlackRock doesn't seem to think that this is a significant issue!