The institution is showing interest in crypto despite the bear market by forming a high-profile partnership. BlackRock, the largest asset manager in the world, has partnered crypto exchange Coinbase to provide institutional users of its Aladdin platform with access to cryptocurrency through Coinbase Prime.
BlackRock’s institutional clients, who collectively manage $20 trillion, will have access to Coinbase’s trading and custody services. Initial access will be to Bitcoin.
This is a significant development for crypto exchanges in a time of turmoil. The company laid off 18% its workforce in preparation for what it believes will be an ” extended Crypto Winter.” The company’s shares (COIN), which are currently down 60%, rose 22% Thursday morning on BlackRock news.
CoinMarketCap reports that Coinbase has more than 200 coins listed and had $1.6 billion of trading volume in the last day. According to Brett Tejpaul (head of Coinbase Institutional), 70% of this volume is accounted for by Coinbase’s institutional clients.
He stated that Coinbase’s strategy was to offer a single point to access the market to do all things related to crypto, including buy, sell, store and stake. Aladdin’s partnership to provide $20 trillion in capital access to crypto is a game-changer, I believe for Coinbase as well as for the industry.
He said that the interest shown by institutions in rough markets hasn’t diminished.
Tejpaul stated that these slow-moving giants can take literally years to think of digital assets, cryptocurrency. They would take a year to 18 month to move fast. It’s nice to see that institutions continue to join despite a volatile backdrop for all markets and cryptocurrency.
BlackRock stated in a press release, that clients will now be able track their crypto investments along with the rest of the portfolio.
According to the release, Joseph Chalom from BlackRock’s global head for strategic ecosystem partnership, “This connectivity will allow clients manage their Bitcoin exposures direct in their existing portfolio management, trading workflows, for a whole portfolio look of risks across asset classes,” Chalom said.
BlackRock is not the only company to announce crypto news this year.
The $10 trillion asset manager published the iShares Blockchain & Tech ETF in April. This gives investors access to blockchain technology without investing directly in digital assets.
COIN shares made up 11.45% at the time. This has now increased to 13.27%. The iShares ETF trades on New York Stock Exchange Arca with the IBLC ticker. It has $6.7 Million under management.
Coinbase also launched derivatives trading at June’s end. now offers a “nano” Bitcoin futures trading contract, which can be bought in denominations equal or greater than 1/100th Bitcoin. Third-party retail brokers can offer the contract.
The Coinbase acquisitions of FairX made the offering possible. FairX is already regulated under the Commodities Futures Trading Commission. It’s the exact same way FTX entered America’s derivatives market with its purchase of LedgerX, and Crypto.com with the acquisition of North American Derivatives Exchange.
Coinbase has an application for a Futures Commission Merchant with the National Futures Association.
Tejpaul stated that they are currently pursuing their FCM. “Then we hope that at one point in time, you’ll have the ability to access both spot futures and futures on one platform.” The application for a Futures Commission Merchant license is still pending at the National Futures Association. If approved, it would be granted.