Cryptocurrency exchange Coinbase announced via a blog post on Thursday that it was partnering with BlackRock, the world’s largest asset manager, to provide its clients with direct access to cryptocurrency, starting with the biggest one in the market, Bitcoin.
Clients of BlackRock’s institutional investment management platform Aladdin will receive cryptocurrency trading, custody, prime brokerage, and reporting capabilities if they choose to sign up for Coinbase Prime, an institutional trading solution that provides trading, custody, prime financing, staking, data, and reporting services on over 300 digital assets. BlackRock, which manages around $9 trillion in customer funds, will use Coinbase Prime, a service tailored to entities such as hedge funds, asset collectors, financial institutions, and corporate treasuries and services 13,000 clients, to provide the service. Earlier in the year, BlackRock CEO Larry Find hinted that the asset management powerhouse might be exploring crypto trading. He noted at the time that the demand for cryptocurrency exposure was growing at a repaid speed. Speaking about the announcement, BlackRock’s global head of strategic ecosystem partnerships, Joseph Chalom, marked that the company’s clients are increasingly interested in gaining exposure to cryptocurrencies, saying,
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.
Institutional investors are able to access Coinbase Prime directly via a user interface or alternatively, as an integrated platform via APIs to offer cryptocurrency-related products such as exchange-traded funds (ETFs), custodial solutions, or brokerage services. The partnership will let them “manage their bitcoin exposures directly in their existing portfolio management and trading workflows.”
Coinbase has recently come under fire from various sources. Last month, the SEC arrested a former product manager on charges of insider trading, and it is also investigating whether the exchange allowed users to trade unregistered securities.
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