BlackRock to Offer Crypto for Institutional Investors Through Coinbase Prime

BlackRock, the world's biggest asset manager, has formed a partnership with publicly traded crypto exchange Coinbase (COIN) to make crypto directly available to institutional investors.

Mutual customers of Coinbase and BlackRock’s investment management platform, Aladdin, will have access to crypto trading, custody, prime brokerage and reporting capabilities, according to a blog post Thursday.

BlackRock had $8.5 trillion in assets under management as of the second quarter of 2022, while Aladdin has more than 200 institutional users, including insurers, pensions, corporations, asset managers, banks and official institutions, according to a Thursday note from Oppenheimer.

Shares of Coinbase, which have declined sharply amidst the rout in crypto prices, jumped on the news, while those of BlackRock were up slightly to $693.11.

“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,” Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, said in the blog post.

“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,” he added.

The access will be granted through Coinbase Prime, an existing integrated trading platform for institutional crypto investors. The companies will continue to develop the platform's integration and roll out different functions in phases, the blog post said.

Read more: Coinbase, With 9K Institutions Already Enlisted, Launches ‘Prime’ Out of Beta

The integration comes four months after BlackRock CEO Larry Fink said the firm would explore ways to offer digital assets to its clients, confirming continued interest by institutional investors in the cryptocurrency industry.

Coinbase has struggled this year amid the plunge in crypto prices, stiff competition and a recent regulatory jolt. Luring more institutional money could pave the way for its recovery and a broader rebound for the entire digital-asset industry.

“BlackRock’s deep expertise in investment management technology, combined with Coinbase’s integrated and secure trading, custody and prime brokerage product suite will facilitate greater institutional access and transparency to digital asset investing," Coinbase President Emilie Choi said in an emailed statement.

Read more: How Are Institutions and Companies Investing in Crypto?

UPDATE (August 4, 15:55 UTC): Added information about BlackRock's assets, Aladdin's user base and Coinbase shares.