Coinbase surges after BlackRock partnership announcement

Coinbase jumps 10% in Thursday trading but slips 1% after Friday's opening bell

The Coinbase logo peeks through a gap in a pile of Bitcoins                                 
Coinbase stock has fallen by 64% since the start of 2022 – Photo: Shutterstock

Coinbase stock traded up 10% on Thursday after the US cryptocurrency exchange announced a partnership with BlackRock, the largest asset manager in the world.

The move means clients of BlackRock’s portfolio management platform for institutional investors, Aladdin, will have access to Coinbase’s Prime service.

This service will provide cryptocurrency trading, custodial, prime brokerage and reporting capabilities for clients including hedge funds, financial institutions, corporate treasuries and asset allocators.

Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, said: “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 stock suffers in 2022

A partnership with a company with $8trn in assets under management will have come as sweet relief for embattled Coinbase investors who have seen the company’s stock fall by 64% since the start of the year.

Although Coinbase closed Thursday up 10% at $88.94, the stock enjoyed even larger gains of up to 30% in the hours immediately following the announcement. This stock price surge was likely a product of investors rushing to cover their short positions.

However, with the global economy bracing for what could be a prolonged recession, it is unclear whether Coinbase will be able to maintain this week’s momentum and return to its late-2021 heights. As of 09:45 EDT (UTC -4) on 5 August 2022, the company was trading down by 0.9% at $88.08.

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