Coinbase shares soar more than 20% on rise from meme traders, BlackRock crypto deals

The logo of Coinbase Global Inc, the largest cryptocurrency exchange in the United States, is displayed on the Nasdaq MarketSite jumbotron and others in Times Square in New York, the United States, on April 14, 2021.

Shannon Stapleton | Reuters

Coinbase shares rose on Thursday after the crypto exchange announced a partnership with BlackRock that will allow its institutional clients to buy bitcoins.

Coinbase shares were last up 25.2%. They jumped about 40% earlier in the day.

Services in the company’s Prime offering will be available to clients of BlackRock’s Aladdin portfolio management platform for institutional investors, the company said in a blog post. Coinbase will provide crypto trading, custody, prime brokerage and reporting capabilities. BlackRock is the largest asset manager in the world with more than $8 trillion.

“Our institutional clients are increasingly interested in accessing digital asset markets and focusing on how to effectively manage the lifecycle of these assets,” said Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, in a statement. The partnership will allow them to “manage their bitcoins directly within their existing portfolio management and trading workflow.”

The partnership provides a bit of optimistic news amid a very dark period for crypto companies. The industry has been hit by numerous hacks and hacks, including the Solana and Nomad attacks just this week. Crypto also went lower with a broader sell-off in risky assets and further weighed down by the financial contagion that arose from the Terra crash in the spring.

Coinbase shares have been falling lately, and analysts aren’t sure why. Shares jumped 20% on Wednesday. The stock is still down nearly 70% for 2022 through Wednesday’s close.

Coinbase’s unusual jump this week may be due to investors who were betting against the stock scrambling to cover their short positions, a so-called short squeeze. According to FactSet, more than 22% of Coinbase shares available for trading are sold short. So when the stock runs, those investors have to buy back the stock to cover their losses, further contributing to profits.

The COIN coin was also one of the most mentioned names on Reddit’s WallStreetBets on Thursday, surpassing GameStop’s popularity on the online forum, according to alternative data provider Quiver Quantitative.

— CNBC’s Yun Li contributed to this report.

Coinbase shares soar more than 20% on rise from meme traders, BlackRock crypto deals

Source link Coinbase shares soar more than 20% on rise from meme traders, BlackRock crypto deals

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