Coinbase to offer BlackRock’s biggest institutional clients access to crypto trading

Coinbase is partnering with BlackRock, the world’s largest asset manager, to offer its institutional clients access to crypto trading through its platform, the crypto exchange said Thursday. 

Coinbase’s share price surged more than 18% to $95.47 on Thursday after the exchange said it will offer customers of BlackRock’s investment management platform, Aladdin, direct access to crypto trading starting with Bitcoin. Aladdin will be connected with Coinbase’s suite of institutional products, known as Prime.

“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,” BlackRock’s Global Head of Strategic Ecosystem Partnerships at BlackRock Joseph Chalom said in a statement.

The move comes as institutional interest in the crypto space remains high despite a recent market downturn. The price of Bitcoin, the most popular cryptocurrency, is down about 51% year-to-date at $23,000 as of Thursday and is trading 66% lower than its high of nearly $69,000 last November.

The tie-up between BlackRock and Coinbase comes as the crypto exchange is battling regulatory headwinds. Reports last week stated that the Securities and Exchange Commission was investigating whether Coinbase had improperly allowed its customers to trade digital assets that should have been registered as securities. 

Coinbase Chief Legal Officer Paul Grewal said in response to the story that Coinbase is confident in its due diligence process.

“We are confident that our rigorous diligence process—a process the SEC has already reviewed—keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” Grewal said in a tweet on July 25. 
BlackRock has previously expressed his interest in digital assets. In his annual letter to shareholders, CEO Larry Fink said Russia’s invasion of Ukraine would cause the countries to reconsider how much they depend on traditional payment systems and fiat currencies. He added in the March letter that BlackRock was studying how digital currencies and stablecoins could help the company’s clients.