As a result of Coinbase's partnership with BlackRock, which will allow institutional customers to buy bitcoin, the crypto exchange's stock soared on Thursday.
The shares of Coinbase were up by 25.2% at the time of writing. Earlier in the day, they had jumped as high as about 40% earlier in the day.
According to BlackRock's blog, Prime will be available to clients of Aladdin, its portfolio management platform for institutional investors.
Coinbase will provide crypto trading, custody, prime brokerage, and reporting services. With over $8 trillion under management, BlackRock is the world's largest asset manager.
According to alternative data provider Quiver Quantitative, COIN also topped GameStop's popularity in Reddit's WallStreetBets on Thursday.
Joseph Chalom, BlackRock's global head of strategic ecosystem partnerships, said institutional clients are increasingly interested in digital assets.
As a result of the partnership, they will be able to manage bitcoin exposures directly within their existing portfolio management and trading workflows
For the crypto community, that interest is a beacon in the night. This week alone, Solana and Nomad have been attacked, resulting in a slew of hacks and breaches.
Additionally, crypto has been hit by the sell-off in risk assets and the financial contagion that resulted from Terra's collapse in the spring.
For bitcoin and perhaps the broader crypto market to mature, stabilize and increase in price, institutional adoption is crucial.
Analysts are not sure why Coinbase shares are on a tear lately. On Wednesday, the stock jumped 20%. Through Wednesday's close, the shares were still down nearly 70% for 2022.
The unusual jump in Coinbase this week may be the result of investors scrambling to cover their short positions. Over 22% of Coinbase's shares are sold short, according to FactSet.
In order to cover their losses, these investors have to buy back the stock, further fueling the gains.