Two companies with significant eminence in the digital financial sector recently joined forces to change the game in the currently beleaguered cryptocurrency industry.
Despite recent price crashes and regulatory investigations, BlackRock Inc., the world’s largest asset management firm, and Coinbase Global Inc., one of the leading cryptocurrency trading exchanges, have teamed up to make things easier for institutional investors to get into Bitcoin trading and management.
Through the BlackRock – Coinbase team-up, the former’s clients can use an Aladdin investment and management system to handle their exposure to Bitcoin while facilitating financial matters, trading, and even managing other conventional portfolio assets like stocks and bonds on the latter’s platform.
At the moment, the partnership will focus on Bitcoin. It has, nevertheless, been hinted that other digital tokens will be added over time.
When Traditional Banks Get Into the Digital Scene
BlackRock’s involvement is the most recent move by traditional financial institutions to get into cryptocurrency and the fintech sector. It’s also seen as a sign of confidence in cryptos despite issues regarding several major players in the digital asset scene.
According to Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, the firm’s institutional clients have expressed growing interest in gaining exposure to the digital asset sector. Chalom added that these clients tend to focus on how to properly and efficiently manage the operational lifecycle of cryptocurrencies and similar virtual assets.
Coinbase, on the other hand, has been working on how to build up its institutional client base through its Coinbase Prime trading platform. Based on materials released by the company regarding this specific platform, Prime handles hedge funds, corporate treasuries, and other financial institutions.
Looking Forward to Recovery
The partnership is expected to bring relief to the struggling crypto trading platform. Just last week, Coinbase lost over two-thirds of its stock value. However, the company appeared to bounce back as the trading week ended on August 5th, its value rising by 15% to settle at $92.61 per share.
It has been a difficult time all around for the glove cryptocurrency industry. In this year alone, three specific events sent shockwaves throughout the industry. Bitcoin, in particular, lost around half of its trading value earlier this year.
Likewise, Terra’s downfall and its ecosystem have put the industry’s resilience in a precarious situation. On the other hand, the equally shocking collapse of the digital hedge fund Three Arrows Capital has raised eyebrows among regulators.