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After increasing more than 16% on the partnership news, Coinbase stock added 1.24% to $90.00 in after-hours trading.
Shares of Coinbase Global Inc (NASDAQ: COIN) popped on the news of its partnership with investment management company BlackRock (NYSE: BLK). The crypto exchange company soared over 16% on April 4th before closing at $88.90. Coinbase announced that it has agreed with BlackRock to give institutional investors access to crypto. This is a significant milestone for the asset manager, which had earlier hinted at the possibility of bringing crypto services to its clients.
BlackRock to Offer Crypto Services to Institutional Clients In Partnership with Coinbase
Upon the partnership between BlackRock and Coinbase, the asset manager’s institutional investors will have access to crypto through Coinbase Prime. Coinbase Prime is specially built for instinctual clients for integrated trading solutions. The investment management company said clients would initially have access to Bitcoin, paving its way into the crypto world. The company also plans to onboard more cryptocurrencies soon, based on consumer demand. Coinbase users who also use Aladdin, BlackRock’s investment management platform, will enjoy crypto custody, trading, and prime brokerage. Aladdin has over 200 institutional users, while BlackRock had $8.5 trillion in assets under management as of Q2 2022.
BlackRock CEO Larry Fink said in a March letter to Shareholders that the company was studying crypto. Fink said the company was examining digital currencies, stablecoins, and the underlying technology to understand how to satisfy clients. Months later, the company is now ready to serve its institutional customers. BlackRock’s Global Head of Strategic Ecosystem Partnerships, Joseph Chalom, commented:
“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. 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.”
Coinbase Shares React to Partnership Announcement
After increasing more than 16% on the partnership news, Coinbase stock added 1.24% to $90.00 in after-hours trading. The new deal offers positive news for the exchange’s shareholders as the company has declined due to the 2022 crypto crash. As Bitcoin, ETH, and other altcoins plunged over the month, Coinbase slumped 64.77% since the year started. The last three months have also seen the exchange drop by 22.19% after falling 65.21% in the last twelve months. With the addition and a 42.81% rise in the last five days, the new deal may push Coinbase through the market condition. The exchange’s President Emilie Choi stated:
“BlackRock’s deep expertise in investment management technology, combined with Coinbase’s integrated and secure trading, custody and prime brokerage product suite will facilitate greater institutional access and transparency to digital asset investing.”
The stock of the asset manager has also pumped 5.26% in the last five days and increased 11.59% over the past month.