In Thursday’s session, the title of the largest cryptocurrency exchange in the United States, Coinbase gained the 10%following the announcement of the agreement with BlackRock. Institutional clients of Aladdin, BlackRock’s end-to-end investment management platform, will have direct access to Bitcoin through the connection with Coinbase Prime, which will provide crypto trading, custody, brokerage and reporting services. Users will need to be Aladdin and Coinbase customers. “Connectivity with Aladdin will allow clients to manage their Bitcoin exposures directly into existing portfolio management and trading workflows for a view of the entire risk portfolio across asset classes”.
“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”he has declared Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships. For now, the partnership is only valid for Bitcoin.
Thursday’s rally was the third consecutive day of exchange gains for Coinbase, heading the stock towards record weekly gain.
For Coinbase investors, the news is a fundamental signal because it confirms itself as a leader in the world of cryptocurrencies. Having said that, we remind you that since the beginning of the year the stock has been down by 62% compared to all-time highs.
To support the fragile mood of investors, the news of a partnership between Coinbase and the major asset manager BlackRock to offer Bitcoin trading to institutional clients. Although the offer is currently limited to Bitcoin, nothing can rule out a future expansion of the product range, perhaps on the condition of a clearance from the SEC regarding the consideration of other crypto assets as shares or not. Obviously, Coinbase benefited the most from it, more than Bitcoin, with the stock gaining over 40%, and then closing at + 10%. World of cryptocurrencies which nevertheless benefits from a breath of confidence from the financial world, after the recent attacks, comments Gabriel Debach, market analyst at eToro.
The sudden surge in Coinbase stock almost added 2 billion of dollars in value in terms of market capitalization, bringing it back almost above $ 20 billion for the first time since mid-May. While it is more than double the size of rival Robinhood, it is a far cry from the near-peak rating 75 billion in November, when Bitcoin was trading at a record high.
The company has faced a wave of headwinds in recent months as its trading volumes have fallen due to a plunge in the price of Bitcoin and other digital tokens. It is also facing an investigation by the US Securities and Exchange Commission (SEC) to see if it improperly allows US clients to trade assets that should have been registered as securities.
The surge in Coinbase stock threatens short sellers
Short sellers, meanwhile, are experiencing a setback as the stock extends the strong rebound since early July. While “shorts” are still up more than $ 800 million this year, those yields are 40% lower than before Thursday’s jump, according to Ihor Dusaniwskychief executive of predictive analytics at S3 Partners. “We expect continued short coverage in Coinbase as BlackRock’s announced partnership puts a python-like squeeze on short sellers,” he has declared.
Shares of Coinbase plummeted more than 21% on July 26 after Cathie Wood-controlled funds sold about $ 1.4 million worth of shares in the company’s holdings, worth about $ 75 million at the time. .
The partnership between Coinbase and BlackRock is noteworthy also because it comes on a day when the prices of Bitcoin, Ether and other popular digital assets were falling. The Coinbase stock has maintained a close correlation with the cryptocurrency queen, Bitcoin, since it became a public company.
Other stocks related to the crypto world also rose after the announcement of the deal with BlackRock, shares of Marathon Digital Holdings and Silvergate Capital recorded an increase of more than 1%.
“This is very positive and equally necessary news for cryptocurrency traders and should provide some optimism for the long-term cryptoverse.“Said Ed Moya, an analyst at Oanda. “Claims that cryptography is dead have been exaggerated. “