Bitcoin
Chicago Mercantile Exchange Plans Bitcoin Trading Launch
Last updated: May 16, 2024 02:28 EDT | 1 minute reading
The Chicago Mercantile Exchange (CME) is planning to launch Bitcoin trading, seeking to capitalize on the growing demand for Bitcoin among Wall Street fund managers this year.
O Financial Times reported Thursday, the CME was in talks with crypto traders about offering a regulated market for buying and selling Bitcoin.
The plans are not yet finalized. But CME’s potential Bitcoin trading plan means a continued push from Wall Street giants into the crypto space. This follows the SEC green light in January for Spot Bitcoin exchange-traded funds.
According to the FT, it plans to offer its potential Bitcoin spot trading business through EBS. This is a Swiss currency trading platform known for its strict regulations on trading and storing crypto assets.
A CME Group spokesperson declined to comment.
Chicago Mercantile Exchange spot trading to fuel ‘basic trading’
The addition of Bitcoin spot trading to the CME existing Bitcoin futures offerings it would open doors for investors to easily execute “basic trades,” according to the FT.
Basic trading involves borrowing money to sell futures contracts and at the same time buying the underlying Bitcoin, with the aim of profiting from the small price difference between them. This strategy is already a staple in the US Treasury market, with a significant portion happening on CME platforms.
CME Dethrones Binance as Institutions Plunge
CME has grown to become one of the world’s leading Bitcoin futures markets, dethroning Binance. This increase reflects a renewed wave of interest from institutional investors looking to capitalize on Bitcoin’s volatility.
A 2020 Bit-by-Bit Asset Management Study found that the CME Bitcoin futures market consistently outperforms the spot market.
In a move to increase transparency and trust in cryptocurrency trading, CME Group has joined forces with CF Benchmarks. Together, they developed standardized reference rates and spot price indices for popular cryptocurrencies like Bitcoin and Ether. This collaboration provides a clear and reliable picture of cryptocurrency values.