With Coinbase Prime and Aladdin integration, Coinbase and BlackRock will create new access points for institutional crypto adoption.
Coinbase announced that BlackRock would now offer bitcoin trading and custody services, despite the cryptocurrency bear market. They are enabling institutional investors to purchase the cryptocurrency via its Aladdin platform.
The Coinbase blog written by Brett Tejpaul, Head of Coinbase Institutional, and Greg Tusar,Vice President, Institutional Product, reads, “Over the past few years, Coinbase has played a central role in developing and strengthening crypto markets as the safest, most trusted bridge to the crypto economy. Today marks an exciting next step on our journey as we announce that Coinbase is partnering with BlackRock, the world’s largest asset manager, to provide institutional clients of Aladdin®, BlackRock’s end-to-end investment management platform, with direct access to crypto, starting with bitcoin, through connectivity with Coinbase Prime.”
Philipp Pieper, co-founder, and CEO of Swarm Markets, the Berlin-based multi-asset decentralized finance (DeFi) platform, comments that the partnership is notable.
“This is not the most exciting aspect of it. The deal, which focuses on crypto institutional investing, is tantalizing because it shows a direction for the crypto sector toward more TradFi integration.”
“Although not a DeFi partnership, this tie-up demonstrates the future for the sector. TradFi/DeFi partnerships will become the norm, integrating as Fi. DeFi has an opportunity to transcend investment platform offerings and give traditional institutions and users access to key game-changing technologies.”
According to Statista, between December 2020 and January 2021, cryptocurrencies such as bitcoin and Dogecoin became significantly more popular as the price of bitcoin rose significantly.
Coinbase Prime is the leading institutional prime broker platform in the crypto asset market. With Coinbase Prime, institutions can complete the entire transaction lifecycle of trading, custody, staking, reporting, and data and analytics, as well as advanced multi-venue agency trade execution for 200 assets.
The Coinbase wallet had much more popular than many other cryptocurrency wallets. Coinbase’s popularity wasn’t limited to its native country USA.
However, over half of respondents in the United Kingdom preferred Coinbase over other exchanges in 2019, with DAU figures from 2021 further strengthening the app’s position. The popularity of Coinbase in Germany in 2021 was also high, even though several domestic alternatives were available.
However, 2022 saw the company lay off 18% of its workforce due to recessionary fears and a $1.1 billion net loss in the second quarter of 2022 as the crypto winter scared away retail investors.
According to their investor’s report, there was a 30% plunge in trading volumes during these three months and a 35% decline in transaction revenues. Additionally, the company faces an investigation by the US Securities and Exchange Commission regarding U.S. customers illegally trading securities.
According to Bloomberg, in the wake of its announcement that the company would partner with BlackRock, shares of the largest U.S. cryptocurrency exchange gained 10% Thursday.
During the surge, nearly $2 billion worth of market capitalization was added to the company’s market cap, bringing it back to above $20 billion for the first time since mid-May.
Piper also notes long-term, “What we’re ultimately likely to see in the next few years is the progressive adoption by TradFi of DeFi infrastructure that is at its heart, transparent, secure and accessible. The endgame of this is the blurring of the lines between the sectors. We see the financial industry, in general, adopting DeFi infrastructure to underpin everything from recording asset transactions to custody, trading, and everything in between.”
Helen Femi Williams is a freelance journalist and podcaster interested in fintech, politics, economics, and their intersections.
She is the host of the letsgetlitical podcast, a fortnightly show interviewing guests from all different sides of the political spectrum, in partnership with the Mozilla Foundation.
Prior to this role, she worked as an innovation consultant developing insurtech and fintech products and ideas for brands, startups, and major corporations.
She studied International Relations at the University of Nottingham (UK and Malaysia).