After the cryptocurrency exchange announced a partnership with BlackRock (BLK) that will let institutional clients buy bitcoin, Coinbase shares went up by more than 75% from their 52-week low. But when it reports its second-quarter results on Tuesday, the world’s second-largest cryptocurrency exchange is likely to show a sharp drop in sales and profits.
The crash of the crypto market, which started in May when the terra/Luna algorithmic stablecoin went down in a big way, will have done a lot of damage to the US-based trading platform.
Coinbase (COIN) is traded on Nasdaq (IXIC), and analysts expect the quarterly loss to grow from $1.98 per share in the last quarter to $2.47 (£2.04) per share in the next quarter.
Even though people are expecting Coinbase’s quarterly results to be bad, the crypto-share exchange’s price has been going up recently.
Before today’s earnings report, the second largest cryptocurrency exchange continued a rally that started in earnest at the end of July, when the share price had dropped to $49.
After the opening bell in New York today, shares of COIN went down by 8.47 percent, and as of this writing, they are worth $89.72 per share.
BlackRock is the biggest asset manager in the world, but the fact that this giant of institutional finance is interested in bitcoin hasn’t made the cryptocurrency sector feel any better.
There hasn’t been a full reversal of the bearish trend of the crypto market yet.
BlackRock’s partnership with Coinbase (COIN) shows that bitcoin is a legitimate asset class, just like stocks, bonds, commodities, and currencies.
In a statement posted online, BlackRock said that clients of its Aladdin portfolio management platform will be able to use Coinbase Prime to get crypto services.
Coinbase Prime is an exchange platform made just for institutions. It lets institutions trade over 200 assets and stake cryptocurrencies for annual or monthly returns.
Institutions can use Coinbase Prime to set up a full staking infrastructure for cryptocurrencies like Ethereum.
When Ethereum (ETH-USD) “merges” to a proof of stake validation method in the middle of September, institutions will be able to help set up staking nodes and get access to the staking rewards that will start to build up.
This is a big deal, especially since BlackRock is one of the biggest asset management companies in the world.
With more than $8 trillion in assets under management, the financial institution is the biggest asset manager in the world.
BlackRock clients will be able to buy Bitcoin at first, but other digital assets could be added in the future.
Joseph Chalom, the global head of strategic ecosystem partnerships at BlackRock, said, “Our institutional clients are becoming more interested in getting exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets.”
Marcus Sotiriou, an analyst at GlobalBlock, said of BlackRock’s move into the cryptocurrency ecosystem, “This is a huge milestone for the crypto space because it shows that BlackRock’s clients and institutional investors want access to Bitcoin. I think this could be seen as a green light by other funds to move into the crypto space as well.”
Bitcoin (USD-BTC) has had a good start to the week so far. At $23,850, the world’s most popular cryptocurrency is up 2.2% in the last week.
The price of ethereum (ETH-USD), which is the second largest cryptocurrency by market capitalization, has gone up 8.6% in the past week and is now worth $1,781.
