Coinbase (COIN, $88.90), the cryptocurrency exchange announced a new partnership with asset management giant BlackRock (BLK, $696.01). The tie up connects BlackRock’s investment platform, Aladdin, and Coinbase Prime with the companies jointly providing crypto trading, custody, prime brokerage and reporting capabilities to both their clients.
Furthermore, Coinbase shares started the trading day with a 31% increase to $106. The tie-ups popularity was clearly indicated by the sheer volume of shares sold. More than 25 million shares of Coinbase were traded in the opening hour of trading, compared to the stock's average daily volume of 15 million shares.
The news underscores how traditional institutions including pension funds, hedge funds, and banks have been pushing into crypto assets over the past 18 months, wagering the alternative asset class is here to stay. Institutional trading volumes on Coinbase in the first quarter of 2022 were $235 billion compared with $74 billion for retail customers, its filings show. The news also comes on the back of the fact that Coinbase is currently being investigated by the SEC in regards to the trading of digital tokens.
Why it matters
The move adds further credence to the argument that despite its significant downturn this year, investors and institutions alike still hold faith within crypto. Analysts feel that the death of crypto - despite its bankruptcy inducing downward spiral earlier this year - has been greatly exaggerated.
