BlackRock And Coinbase Announce New Partnership To Help Investors Get More Involved With Bitcoin

BlackRock Inc. is teaming up with Coinbase Global Inc. to simplify the process for institutional investors to manage and trade Bitcoin (BTC), ushering the worlds biggest asset manager into a crypto market roiled by falling prices, regulations, and government investigations.

Whats there to know about the partnership?

According to a statement issued last week, BlackRock clients will be able to utilize its Aladdin investment system to manage their exposure to BTC alongside other portfolio assets like bonds and stocks, as well as to facilitate trading and financing via Coinbase. Additionally, BlackRock representatives have stated that the partnership with Coinbase shall initially focus on Bitcoin with discussions for incorporating other cryptocurrencies like Ethereum to be considered at a later date.

Although 2022 has mostly been a negative year so far for many digital asset markets, BlackRocks move has nonetheless bolstered Wall Streets traditional financial players involvement in cryptocurrencies and related technologies. Still, there is no denying that Bitcoin has taken a massive hit this year thanks to incidents like the Terra disaster and the downfall of Three Arrows Capital. Incidents like these have raised concerns regarding the markets resilience which has since also resulted in more regulatory scrutiny as of late.

A new day for Coinbase and crypto?

The collaboration with BlackRock has provided a brief respite to the largest U.S cryptocurrency trading platform, as Coinbases stock had recently lost over two-thirds of its value this year. The United States Securities and Exchange Commission has also been investigating Coinbase for allowing American citizens to trade digital assets which should have reportedly been registered as securities.

Nevertheless, Coinbases situation could soon improve thanks to the new collaboration. BlackRock selected Coinbase as a partner primarily because of its market scale and role in offering trading and custody services, as well as prime brokerage and reporting functionalities.Lastly, although both companies clients shall be able to use the services, perhaps the more important aspect of the partnership is that it is indicative of the sheer amount of interest in Bitcoin and digital assets by institutional investors. This would imply that although the cryptocurrency market is yet to fully recover, many large-scale companies and corporations are keen to explore the possibilities of crypto, blockchain, NFTs, the metaverse, and DeFi in general for their respective features and services going forward.