working together with
trading services to institutional clients, representing a push into cryptocurrencies for the world’s largest asset manager and a ringing endorsement for the embattled crypto exchange.
Institutional investors who use
Aladdin investment management platform and are customers of Coinbase will now be able to directly access crypto trading, prime brokerage and custody services through Coinbase’s institutional arm, Prime. The digital asset trading bond will initially be limited to Bitcoin.
Shares of Coinbase (ticker: COIN) rose 16%, building on gains from a 20% rally on Wednesday, amid what one analyst described as a brief squeeze separated from some fundamentals. BlackRock ( BLK ) stock traded 0.4% higher.
“Coinbase Prime integrates advanced agency trading, custody, prime funding, staking and staking infrastructure, data and reporting that support the entire transaction lifecycle,” said Brett Tejpaul, head of Coinbase’s institutional arm, and Greg Tusar, vice president of institutional operations. product, in a statement. “The Coinbase partnership between BlackRock and Aladdin is an exciting milestone for our firm.”
There is a burst of good news for the digital asset exchange. While the partnership with BlackRock doesn’t represent incremental revenue — because the services are only being extended to existing Coinbase customers — it’s still a ringing recommendation for a beaten-up stock.
Coinbase shares have fallen more than 60% this year due to a selloff in tech stocks and a collapse in cryptocurrencies — the shares tend to be correlated with swings in Bitcoin — exacerbated by a drop in trading volumes, which is squeezing revenue.
The collaboration also marks a strong push into the digital assets area 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 spark of institutional adoption and investment in the nascent space.
“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,” Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, said in a statement.
Write to Jack Denton at [email protected]