Coinbase stock gets a hefty price boost thanks to Wall Street giants, BlackRock
Coinbase has been able to bounce back in this current stock market bear market.
Thanks to BlackRock, the largest asset management firm joining forces with Coinbase to present a new service.
This new service allows institutions access to their own crypto wallets and trading. Ultimately it’s evident this news is a positive sign for crypto as big names have been given new access to the crypto market.
The stock rising steadily
The stock has steadily risen over the past few days continuing an uptrend in price since July 26th.
Since Coinbase’s IPO the price of their stock has steadily declined from an original price of 342 USD so this is a pleasant surprise to holders.
At the time of writing its current price is sitting at 98 USD, a 37% price increase in just 5 days, adding onto its initial 20% gain.
Experts have described the initial rise in price to be a reaction to a ‘short squeeze’. A short squeeze is where a high volume of traders have bought a stock causing it to catapult in price, similar to happenings of AMC and Gamestop (GME).
For those who keep up to date with crypto related news, you will be aware of the SEC investigation that has recently begun on Coinbase.
The SEC investigation
Despite Coinbase’s dominance over the crypto market as a crypto exchange they are still knee deep in the controversy. Allegations were dropped by the SEC after Coinbase were accused of offering unregistered securities to their users.
“We are confident that our rigorous diligence process – a process the SEC has already reviewed – keeps securities off our platform, and we look forward to engaging with the SEC on the matter.”
This quote comes from the Chief Legal Officer of Coinbase, Paul Grewal. Coinbase have also raised the argument that the SEC is not clear on their legislation for cryptocurrencies thus leading an issue like this to arise.
Off the back of this news, the stock’s price plummeted 20% due to the negative reaction from traders and investors.
BlackRock to the rescue!
BlackRock has amassed a whopping 8 trillion USD worth of assets under management.
With the overall popularity of cryptocurrencies in the past few years, it comes as no surprise that many of BlackRock’s clients are looking to expand their company holdings into the blockchain.
With many of their clients being placed into corporate/commercial industries this exposure should solidify cryptocurrencies as tangible assets, accepted by wider society.
Coinbase as a company has really needed this boost in morale, even if it doesn’t necessarily drive them an increase in revenue.
With recent stories of the ‘stablecoin’, LUNA crashing in price and other notable crypto related headlines, many investors in the space have potentially become sceptical due to the lack of security.
However, cryptocurrencies are still a fairly new concept that will show cracks at the start of its lifespan. With institutional giants like BlackRock getting involved the crypto winter may be over before we know it!