Why Coinbase, Ethereum, and Dogecoin Popped Today

What happened 

Wall Street’s trading week is ending positively for cryptocurrencies as most major tokens rise sharply on Friday. Even exchange Coinbase Global (COIN 5.15%) has continued its meteoric rise. 

Shares of Coinbase jumped as much as 11.2% in early trading but were up just 2.5% as of 1:50 p.m. ET. The value of Ethereum (ETH 5.81%) popped as much as 9.2% in the last 24 hours while Dogecoin (DOGE 3.65%) was up as much as 7%. 

So what 

The week’s biggest news was Coinbase striking a deal with BlackRock to provide services to institutional clients of Aladdin, BlackRock’s investment management platform. This could bring billions of dollars of investments into Coinbase’s ecosystem and generate revenue from trading fees and staking.

Today’s news was that Meta Platforms‘ Instagram is rolling out non-fungible token (NFT) support in 100 countries with Coinbase Wallet as an option. Testing of the feature began in May and this is a broader rollout of the feature. 

Forbes magazine also reported today that every U.S. crypto exchange is being investigated by the Securities and Exchange Commission (SEC), which could put regulation back in focus over the next few months. Coinbase has been wrapped up in a case that the SEC is enforcing and now it appears it’s not the only company being looked at. At the same time, Congress is already working to give the Commodity Futures Trading Commission (CFTC) most of the regulatory oversight for cryptocurrencies.

Outside of Coinbase’s news and more investigations, there isn’t much crypto-specific news out today and that’s driving the market. Crypto is actually rising as stocks are falling and investors try to make heads or tails of the earnings season so far. 

Now what 

In the U.S., Coinbase is the biggest exchange to watch and the biggest publicly traded crypto stock. So, being embraced by one of the biggest banks in the world is a huge vote of confidence in the company’s trading solutions and security. As institutional investors look to get into crypto, they’re not only worried about making money, but also the safety of digital funds after various issues have arisen over the last year. 

If institutions are getting more interested in crypto, it makes sense that both Coinbase and crypto values overall would go up. It’s not clear if this trend will last, but that’s the thinking today. 

I think this is a long trend of more legitimacy and funding moving into crypto, which could be a tailwind for decades. The ride will be volatile, but I’m bullish on the industry long-term.