With their powerful tools, Wall Street giants are already making the fight unequal in the Forex and Gold markets. Is it time for Bitcoin? BlackRock, the most powerful fund in the financial world, has just set foot in the crypto market, through a partnership easily announced by Coinbase.
Coinbase Prime will be integrated with AI Aladdin
If you follow traditional markets, you may have heard ofAladdin (Asset, Liability, Debt and Derivatives Investment Network), me’AI developed by the American giant BlackRockand thanks to the fund that manages the majority of its assets under management – which exceeded $10 trillion this year.
BNP Paribas, Fannie Mae, Bank of America, Genworth… more than 250 financial institutions are clients of the management system of BlackRock, and his renowned forecasts are used by more than 50,000 managers and major investors.
With its 25 million lines of code and 1600 full-time developers, Aladdin worked in the stock, bond and derivatives markets. Through the integration of Coinbase Prime (Coinbase’s platform for its institutional clients), it is now made for cryptos.
Or rather only for Bitcoin (BTC) first, if we are to believe Coinbase’s press release.
What role will BlackRock play?
First and foremost, BlackRock customers will be headed to invest through Coinbase Prime. So their investments in BTC will be controlled through the software. Aladdin’s richesone of the commercial versions of the system: BTC futures, BTC staking and Bitcoin ETF.
Therefore it will be possible to buy and sell transactions through the software. Some analysts also mention that customers could pledge their cryptocurrencies, and borrow funds on the basis of this collateral.
Then, Coinbase customers will be able to take advantage of this great tool. More than 13,000 entities are known to be Coinbase Prime customers, mainly hedge funds, family offices and private investors.
“Our larger institutional clients are seeking exposure to digital asset markets and are focused on how to effectively manage the lifecycle of investments in these assets. This integration [de Coinbase Prime, ndlr] with Aladdin will enable our clients to manage their bitcoin positions directly in their current portfolio management and trading operations, with global visibility into the risk of all their active investments. Joseph Chalom (Blackrock)
BlackRock’s first BTC investments date back to March 2021
185 BTC : this is the amount of bitcoins purchased by BlackRock in March 2021, through a futures contract on the Chicago Commercial Exchange (CME). Very discreet, we only heard about this investment due to the publication of a report on the website of the SEC, the American stock market police.
In detail, it was 37 standard futures contracts with a maturity of 1 monthfor 5 BTC each, expiring on March 25, 2021.
An anecdotal investment for a fund as big as BlackRock, but one that still allowed him to pocket just over $360,000 in the process…
At the same time, a job offer posted on the giant’s web portal attracted the attention of the financial media, which received only brief statements. The position to be filled was a Director of Engineering, specialist in Digital Assets and Distributed Ledgers increase human abilities ” already in place.
While CEO Larry Fink was just kicking the fence, BlackRock’s plans were becoming clearer, between a change in tone on Bitcoin and launched its in-house crypto ETF, the iShares Blockchain and Tech ETF.
“BlackRock” effect on Coinbase?
It is understood by the markets that such a sprawling player does not position himself without thinking about the potential profits involved, for himself and his partner in the operation.
After the press release, Coinbase stock (NASDAQ: COIN ) gained 10% and closed the session at $88.90, after peaking at $92.666 in early US trading. In the last five days, the rumors of the partnership had already won 48% in the title.
Beyond its stock market price, this partnership is a breath of fresh air for Coinbase, which has suffered greatly due to the ongoing bear market. We reported to you in June that the platform had laid off 1,000 employees (18% of its workforce), and that it was trying to find growth drivers in Europe.
We know that 75% of the daily trading volume on Coinbase comes from its institutional clients. Therefore BlackRock’s partnership with Coinbase, rather than FTX which has a great relationship with the SEC, makes perfect sense.
In light of hyperinflation, many investors see Bitcoin’s current price as an ideal entry point before a possible bull run. If its potential as an alternative currency is not yet clear, the bullish potential of Bitcoin (correlation with technology stocks) is greatly increasing the appetite of institutional investors.
Rather than launch it on its own account, BlackRock chooses to position itself as an intermediary … for now. If we cannot count on the “BlackRock effect” to pull Bitcoin out of its bearish context, we can at least count on the influx of new institutions, clients of the American mega-fund, into the crypto market. Enough to relaunch a new bullish cycle?
To understand the monetary promises of Bitcoin: read our article.