BlackRock offers institutional investors direct crypto access in collaboration with Coinbase

  • BlackRock is now offering crypto to its institutional clients through Coinbase Prime.
  • For now, the new service entails only Bitcoin with plans to expand the offering in the future based on demand. 

Investment management company BlackRock (NYSE: BLK) has announced plans to begin offering crypto to institutional investors. Per the development, the asset manager has partnered with crypto exchange Coinbase (NASDAQ: COIN) to grant investors access through Coinbase Prime. Coinbase Prime is an integrated trading solution built to serve institutional investors.

BlackRock offers crypto to institutional clients

BlackRock’s institutional clients who have crypto on Coinbase will have access to Aladdin, the asset manager’s portfolio management software. Also, mutual customers enjoy crypto trading, prime brokerage, custody, and reporting capabilities. 

The partnership between BlackRock and Coinbase entails only Bitcoin for now, with plans to include more crypto in the future. A BlackRock spokeswoman said the asset manager might expand its offering to other digital assets based on clients’ demands over time. Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock, spoke about the crypto offering direct access directly to institutional investors. He explained:

“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.” 

BlackRock announced its crypto service months after its CEO had hinted at the development. In a letter to shareholders in March, Larry Fink said the asset management company was exploring ways to bring crypto services to its clients. 

As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients.

BlackRock’s CEO bullish on the global digital payment system

The CEO added that a thoughtfully designed global digital payments system could promote the settlement of international transactions. Fink also said that a global digital payment system could reduce the cost of cross-border payments. Meanwhile, BlackRock’s CEO had earlier claimed that the company saw “very little” demand for crypto. In 2021, he said in a CNBC’s Squawk Box interview that clients’ request for digital assets was very low. Interestingly, BlackRock moved from low demand to rolling our crypto service directly to institutional clients. 

Coinbase, on the other hand, has been up and down this year amid the highly volatile crypto market. This year has seen a major crypto crash, with top crypto assets losing significant percentages of their valuation. The crypto exchange has plunged almost 64 percent since the year started and has lost 19.39 percent in the last three months. With a gain of roughly 48 percent in the last five days, Coinbase may rally following the partnership with BlackRock. The exchange’s President Emilie Choi said in a statement:

BlackRock’s deep expertise in investment management technology, combined with Coinbase’s integrated and secure trading, custody and prime coverage product suite will facilitate greater institutional access and transparency to digital to asset investing.

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