Coinbase Shares Soar 40% on Meme Traders and BlackRock Crypto Deal

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

Shannon Stapleton | Reuters

Shares of Coinbase soared as much as 40% on Thursday after the crypto exchange announced a partnership with BlackRock to provide customers with access to cryptocurrency trading, starting with bitcoin.

Coinbase Prime services will be available to customers of BlackRock’s portfolio management platform for institutional investors, Aladdin. It will provide crypto trading, custody, prime brokerage and reporting capabilities. BlackRock is the world’s largest asset manager with over $8 trillion under management.

“Our institutional clients are increasingly interested in exposure to digital asset markets and focused on how to effectively manage the operational lifecycle of these assets,” said Joseph Chalom, Global Head of Strategic Partnerships at ecosystem at BlackRock, in a press release. The partnership will allow them to “manage their bitcoin exposures directly within their existing portfolio management and trading workflows.”

Ticker COIN became 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.

The shares last rose 31.6%.

Coinbase shares have been tearing up lately and analysts are unsure why. The stock jumped 20% on Wednesday. Shares were still down nearly 70% for 2022 through Wednesday’s close.

Coinbase’s unusual jump this week could be related to investors betting against the stock scrambling to cover their short positions, a so-called short squeeze. More than 22% of Coinbase shares available for trading are sold short, according to FactSet. So, as the stock has run, these investors have to buy back the stock to cover their losses, further fueling the gains.

—CNBC’s Yun Li contributed reporting.

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