Coinbase Stock Jumps 20% On 'Huge Validation' From BlackRock: What Investors Need To Know

Zinger Key Points
  • BlackRock institutional clients are 'increasingly interested in gaining exposure to digital asset markets,' the firm said.
  • 21.36% of Coinbase's float is currently sold short, according to data from Benzinga Pro.

Coinbase Global Inc. COIN shares are soaring Thursday after the company announced a partnership with BlackRock. 

What Happened: Coinbase said it will partner with the asset manager to provide institutional clients of Aladdin, BlackRock's investment management platform, with direct access to cryptocurrencies, starting with Bitcoin BTC/USD

Coinbase Prime, which was built for institutions, will provide crypto trading, custody, prime brokerage and reporting capabilities to Aladdin’s institutional clients who are also clients of Coinbase.

"Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets," said Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock.

"This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes."

Why It Matters: Several big names have sold Coinbase stock this year and even announced short positions against the crypto company. About 21.36% of Coinbase's float is currently sold short, according to data from Benzinga Pro.

Kynikos Associates founder and famed short seller Jim Chanos announced a short position in Coinbase in March. Just last week, Ark Invest's Cathie Wood sold $75 million of Coinbase stock for a sizable loss. "Shark Tank" investor Kevin O'Leary cut Coinbase from his portfolio yesterday, citing regulatory concerns.

See Also: Kevin O'Leary Dumps Coinbase, Robinhood Shares, Calling Them 'Toxic Waste': Here's Why The 'Shark Tank' Investor Says The Duo Is Dead Money

Hedge fund Citron Research, which is led by Andrew Left, took to Twitter Inc TWTR on Thursday to weigh in on the BlackRock announcement.

"Huge validation," the firm said. "Just shot down many bear cases on that particular stock."

COIN Price Action: Coinbase has a 52-week high of $258.80 and a 52-week low of $40.83.

The stock was up 21.5% at $98.45 at press time, according to data from Benzinga Pro.

Posted In: CryptocurrencyNewsShort SellersContractsMarketsMoversTrading IdeasAndrew LeftCathie WoodJim ChanosJoseph ChalomKevin O'LearyKynikos Capital