The world’s biggest asset manager BlackRock announced a partnership with Coinbase today to ease the way that institutional investors can buy and track Bitcoin, sending shares in the crypto bourse soaring beyond 30 per cent.
The deal between the two firms will allow top investors to oversee their Bitcoin exposure and facilitate trading on BlackRock’s investment management platform Aladdin, while Coinbase will provide trading, custody, prime brokerage and reporting, BlackRock said. The focus of the partnership will “initially be on Bitcoin”, the firm said in a statement.
It marks a major move into the cryptocurrency space for BlackRock as it looks to ramp up its crypto capabilities for its major clients.
“Our institutional clients are increasingly interested in gaining exposure to digital-asset markets and are focused on how to efficiently manage the operational life cycle of these assets,” Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, said in a statement today.
“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.”
The partnership is a boon to the beleaguered crypto exchange after a turbulent six months in which it has grappled with a tumbling share price and slashed its headcount.
Coinbase is also facing a probe from US regulator the Securities and Exchange Commission into whether it let US investors trade digital assets that should have been registered as securities.
Bosses at Coinbase said today the partnership is an “exciting milestone” for the firm.
“We are committed to pushing the industry forward and creating new access points as institutional crypto adoption continues to rapidly accelerate,” Brett Tejpaul, head of Coinbase Institutional, and Greg Tusar, vice president of institutional product, said in a separate statement.
Shares in Coinbase leapt beyond 30 per cent and are now trading up 17 per cent. The firm is trading down over 50 per cent in the past six months after being caught up in the ‘crypto winter’ that has wiped more than $2th has been wiped off the value of the market.
The most valuable currency Bitcoin is trading down over 38 per cent in the past six months and the market has been hit by a spate of high profile bankruptcies in recent months, including crypto lender Celsius and hedge fund Three Arrows.