Photo by Kelly Sikkema on Unsplash

One of the loudest ringing endorsements of digital assets to date and a watershed moment for the industry was BlackRock’s announcement that it intends to use Coinbase’s prime brokerage service to give institutional clients access to cryptocurrency. 

Everyone should be taking notice. The world's largest asset manager, with over $10 trillion of assets under management, said it’s time to allow its biggest clients into cryptocurrency. Some might be wary of letting such a large asset manager enter the playing field, however, cryptocurrency is constantly growing and changing. If we want continual growth, we need to allow everyone into the game, especially the big players. 

This is imperative for the growth of the crypto space. With BlackRock and Coinbase being such large financial organizations, they can set the tone for how the world looks at cryptocurrency. If there are big players validating crypto, the space will attract more investors and ultimately grow.

Unsurprisingly, Coinbase’s shares are flying on the news, while BlackRock is being rightly praised for its vision and willingness to be a first mover among its competitors. This is also a very exciting development due to the access that has been granted to Aladdin, BlackRock‘s proprietary risk assessment and asset management software that forms the backbone of much of the finance industry. 

This software will allow institutional clients to balance their exposure to cryptocurrency inside their larger portfolios, providing a structured way in which traditional financial clients can build exposure to cryptocurrency. As digital assets are widely seen as riskier than main markets, this could be the entry point many investors need. This could open the door to mainstream adoption in a way that presents much less risk to individual investors. 

Including traditional finance, clients are imperative to the growth of the sector. If we want cryptocurrency to become a mainstream asset, we need everyone involved. In order to attract clients from traditional finance, we cannot rely on niche, complicated crypto platforms, and providers. We need large, institutional projects that can reassure more conservative investors as they make their first foray into this new world. 

When we have large institutional adoption, cryptocurrency evangelists fear the end of days, but cryptocurrency must keep growing and changing. In order to grow, we have to allow the big players to play. And this entry of BlackRock through Coinbase’s prime brokerage service is a good one for the industry that allows for expansion in overall managed assets, while innovation continues in the decentralized finance space and elsewhere. The entrepreneurial spirit prevalent here will ensure this is where the most exciting development will continue to happen.

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