Here's Why Coinbase Stock Surged 39% Today. Is Now the Time to Buy?

Coinbase is teaming with the world's largest asset management firm, BlackRock, to provide crypto assets to institutional investors.

In an unexpected move, the largest investment management firm in the world, BlackRock, has confirmed that it's teaming up with Coinbase to provide access to cryptocurrency assets to the firm's largest investment accounts. The news comes despite a brutal downturn within the crypto sector that caused the space to lose $2 trillion in value overall, and Coinbase stock (Nasdaq: COIN) to tank more than 60% since the start of the year.

"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 and manage their Bitcoin exposures directly in their existing portfolio management and trading workflows," Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock was quoted in a Reuters article.

On that news, the price of Coinbase stock shot up to a high of $112.92 during intraday trading, representing a 39.7% jump over yesterday's close according to Yahoo! Finance. However, the announcement of large investors gaining access to the digital asset category did not appear to have the same effect as both Bitcoin and the broader crypto market were both trading down more than 3% on the day according to CoinMarketCap.

Is Coinbase a good buy?

Coinbase is the largest cryptocurrency exchange in the United States, and it had a launch listing price of $250 a share when it began trading on the NASDAQ stock exchange back on April 21, peaking at $429.54 before closing at $328.28.

This is not financial advice, and investors should always do their due diligence, researching any potential investments and investing only what they can comfortably afford to lose. Coinbase is priced at a deep 73% discount from its all-time high, yet BlackRock, which has more than $8 trillion under management, is taking a big jump into crypto and the digital trading exchange in particular. This might be a catalyst of better things to come for the sector and might establish a higher low for crypto-related stocks -- signaling a good entry point for seasoned investors.