Black Rock and Coinbase partnership: what to expect?

Partnerships happen often. 99% of them can be described as routine. But when such prominent figures like Black Rock come into play, it’s definitely a signal. Black Rock has over $10 trillion in assets under management, a worldwide record for any investment firm by early 2022. However, they don’t have the Holy Grail either: BR lost about $1.7 trillion in a bear market in the first half of the year.

The investment giant is opening up access to bitcoin trading and storage to institutional investors through its Coinbase Prime interface. We’re only talking about the top 200 Black Rock clients with access to its exclusive Aladdin investment management system for now. But these are 200 pretty darn rich guys with practically zero BTC allocations in their portfolios. In this regard, we’re not the only ones asking ourselves, “What would happen if some of Black Rock’s money went into cryptocurrencies?”

Today’s capitalization of all crypto assets combined barely reaches 1.1 trillion. And bitcoin's capitalization is less than half that amount ($443 billion). If the fat cats from Black Rock gave $2 billion each to buy BTC, bitcoin would be worth a trillion dollars again, even at today’s token price.

And the price would surely be much higher, as it always has been when significant capital and names came into the industry – just remember the 30% increase on the spot bitcoin purchase by Tesla in 2021, which made the market break through the seemingly ironclad $40,000 level. This means that much less money than we suggested in our primitive arithmetic will be needed for a new serious pump.

What adds charm to the news of the partnership with Black Rock is that Coinbase is now under investigation by the SEC (U.S. Securities and Exchange Commission). There is a version that the Commission’s claims to the exchange are of the nature of a “demonstrative flogging” so that the arrogant crypto entrepreneurs, who sail on big yachts and change their Lamborghini to match the color of their sneakers, will “come down to the sinful earth” a little bit.

Well, since such a big shot stands up for crypto, it will be harder to hurt the “little” ones. Although we are not against regulators and regulations, we welcome any civilizational change at both the technical and legislative levels. The SEC’s questions about the possible illegal sale of securities under the guise of cryptocurrencies are well worth answering.

The stock market reacted to the news, with Coinbase shares rising 35% to $106.20 in the first 24 hours. Such growth, of course, included a very large discount with which COIN traded. But money speaks louder than words: it seems that Wall Street officially recognized the cryptocurrency sector as undervalued.