BlackRock, an asset manager with more than $10 trillion assets under management (AUM), announced on August 4th, 2022 that it is partnering with Coinbase to facilitate Bitcoin trading services for its clients. In a post shared by Coinbase, the company announced that Coinbase Prime, an institutional brokerage platform with more than 13,000 clients, will work with Aladdin, BlackRock’s end-to-end investment management platform.
With this partnership, Aladdin users will have direct access to Bitcoin trading, custody, prime brokerage, and reporting capabilities. While Coinbase Prime currently offers more than 300 digital assets with different features such as staking, the partnership will focus on Bitcoin and its custody as of now.
Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, stated that the institutional clients of BlackRock are becoming more interested in gaining exposure to Bitcoin and the digital assets market. When discussing the recent partnership, Chalom stated:
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.
For the time being, Bitcoin that is acquired through Aladdin will be held in custody by Coinbase Custody Trust Company. The New York regulated fiduciary company of Coinbase has insurance that covers up to $320 million for holding client assets in cold storage. There is no mention of an option to withdraw Bitcoin from the platform at this time. BlackRock currently serves more than 1,600 clients in the U.S. and Canada.
Reactions from the public appear to be mild or uninterested in the recent partnership. According to Greg Foss, a well-known Bitcoin advocate, people do not yet realize the significance of this announcement.