BlackRock will offer Bitcoin in a partnership with Coinbase Cryptocurrency

  • BlackRock will begin offering bitcoin trading and custody services.
  • The asset manager partners with Coinbase to facilitate trading desk and custody operations for its institutional clients.
  • Coinbase Prime will act as a custodian and it does not appear to have an external wallet transfer feature.

BlackRock, the world’s largest asset manager with over $10 trillion in assets under management (AUM), is launching bitcoin trading services for institutional clients in a new partnership with Coinbase, according to a fellowship blog post.

Coinbase will leverage its institutional brokerage platform Coinbase Prime to provide BlackRock’s Aladdin end-to-end investment management platform with direct access to bitcoin trading and custody.

“Our institutional clients are increasingly interested in exposure to digital asset markets and focused on how to effectively manage the operational lifecycle of these assets,” said Joseph Chalom, Global Head of Strategic Partnerships at ecosystem at BlackRock, through the blog.

“This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly within their existing portfolio management and trading workflows for a complete portfolio view of risk across all asset classes,” Chalom added.

Bitcoin acquired through this integration will be held by Coinbase Custody Trust Company, a New York-regulated trustee. On behalf of its clients, Coinbase Custody holds assets in cold storage and is insured up to $320 million. Although Coinbase Prime users can transfer funds between wallets, they can only do so internally, which means transferring bitcoins outside of the platform does not currently appear to be an option.

BlackRock serves more than 1,600 institutions in the United States and Canada. The investment manager’s interest in bitcoin arose in February when reports of its imminent entry into the ecosystem began to emerge.

At the time, a person familiar with the matter said, “They see all the feed that everyone is getting and want to start making money from it.”

Amanda J. Marsh