Asset manager BlackRock partners with Coinbase, will offer crypto to institutional clients
BlackRock, one of the largest asset managers, has partnered with Coinbase Global to allow its institutional customer base access to crypto, while the latter gets an opportunity to reverse its declining growth consider.
The partnership will bridge Aladdin – BlackRock’s end-to-end investment management platform – with Coinbase Prime to allow institutional clients of BlackRock to have direct access to cryptocurrencies, starting with just Bitcoin for now.
The statement noted, “Coinbase Prime will provide crypto trading, custody, prime brokerage and reporting capabilities to Aladdin’s institutional customer base who are also customers of Coinbase.”
New partnerships are putting pressure on Coinbase’s declining growth
The news comes at a time when Coinbase’s faltering performance has reportedly dented its ranking among the top 10 digital asset exchanges by volume worldwide. It has also ignited the growth rate of competitors such as FTX and Binance as they continue their expansion in the US and Europe. Meanwhile, rumors that the exchange may be facing a liquidity crisis have also recently gained steam on the back of its decision to suspend its affiliate program, further knocking Coinbase down.
Shares of the largest U.S. exchange also took a further hit when Cathie Wood, who is known for steadily accumulating undervalued Coinbase ( COIN ) shares, decided to withdraw following a Bloomberg report that said Coinbase is under investigation by the U.S. Securities and Exchange Commission (SEC).
Ark’s daily trading showed three Ark Investment Management funds sold a little more than 1.41 million shares for a total of about $75 million after being the biggest cheerleader for the company after its Nasdaq listing.
Meanwhile, in the tough environment of a downturn in the crypto market, Faryar Shirzad, head of policy at Coinbase, acknowledged in an interview in June that additional layoffs may occur in the future as part of a long-term strategy to “run the firm properly.” Notably, Coinbase has already fired more than 1,000 employees, which accounted for 18% of its workforce, in recent months.
Therefore, the new partnership could rejuvenate the exchange through Coinbase Prime’s advanced agency trading, custody, insurance and staking, among other functions.
BlackRock reports increased crypto interest among institutions
Coinbase Prime, which is an institutional prime brokerage platform, is reported to serve around 13,000 institutional clients.
For the money manager, the partnership comes on the back of increased institutional demand. Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock stated: “Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to effectively manage the operational lifecycle of these assets.”
“This connection with Aladdin will allow clients to manage their bitcoin exposures directly within their existing portfolio management and trade flow for a whole portfolio view of risk across asset classes,” Chalom added.
CoinShare’s latest report also highlights a strong influx of digital asset products for the month of July, indicating increased investment in crypto by institutions.
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