Coinbase shares soared on Thursday after the cryptocurrency exchange announced a partnership with BlackRock.
Recently, shares of Coinbase increased by 10%. They increased by as much as 40% earlier in the day.
As part of its Prime offering, BlackRock will offer its portfolio management platform Aladdin to institutional investors. Coinbase will offer trading, custody, prime brokerage, and reporting services for cryptocurrencies. With more than $8 trillion in assets under management, BlackRock is the biggest asset manager in the world.
Quiver Quantitative and ticker COIN eclipsed GameStop on Reddit’s WallStreetBets channel on Thursday.
According to a statement by Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, “Our institutional customers are increasingly interested in getting exposure to digital asset markets and are focused on how to manage the operational lifetime of these assets effectively.” Their exposure to bitcoin will manage directly in their current trading and portfolio management processes, thanks to the cooperation.
This enthusiasm serves as a light in the dark for the cryptocurrency industry. The sector has had several hacks and breaches, including this week’s assaults on Solana and Nomad. Additionally, cryptocurrency exchange has suffered from the general sell-off in risky assets and the financial fallout from the Terra collapse in the spring. A growing number of investors believe that institutional acceptance is essential to the development, constancy, and price of bitcoin and maybe the overall crypto market as a whole.
Analysts are unsure of why Coinbase stock has been surging recently. The stock increased by 20% on Wednesday. By Wednesday’s closure, the shares were still down by roughly 70% for the year 2022.
Coinbase’s unexpected price increase cause by investors betting against the company, closing out their short positions or a “short squeeze.” According to FactSet, more than 22% of Coinbase’s publicly traded shares are being sold short. Citi on Thursday termed it the “fizzle before the sizzle” and said it’s on the watch for a stock turnaround over the following three months despite the market’s gloom and decrease in Coinbase’s share price.
Analyst Peter Christiansen stated that Ethereum’s long-awaited switch to proof-of-stake was one of the “positive things developing.“
Why Does BlackRock Provide Crypto To Institutional Investors via Coinbase Prime?