Bitcoin

CME aims to take over Binance and Coinbase and may launch Bitcoin spot trading: report

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6 months ago

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  • 10x Research founder Markus Thielen said cryptocurrency exchanges could lose business if CME starts offering bitcoin spot trading.

  • CME is one of the leading bitcoin futures exchanges by open interest.

Futures powerhouse Chicago Mercantile Exchange (CME) plans to offer bitcoin spot trading to customers as demand for the product increases among market participants, the Financial Times reported On thursday.

CME is already the leading bitcoin futures exchange by open interest, while offshore and unregulated Binance dominates the spot market.

The exchange has held discussions with traders who want to trade bitcoin on a regulated market, the FT reported, citing people with direct knowledge of the trades.

CME’s spot trading business could be managed through the EBS currency trading platform in Switzerland, the report added.

The exchange declined to comment on the report.

The spot market will complement CME’s existing standard and micro futures contracts, which are widely considered a proxy for institutional activity, and will help the exchange become more dominant in the crypto market. CME is already the leading bitcoin futures exchange by open interest, while offshore and unregulated Binance dominates the spot market. Coinbase (COIN), the only cryptocurrency exchange traded in the US, ranks third in daily trading volume.

The availability of the spot market means that traders can now establish complex multi-step strategies involving spot and futures markets in a regulated venue. Transport traders are known to sell CME futures contracts against long positions in the spot market on other exchanges or in spot ETFs.

“Cryptocurrency exchanges could lose some business with the potential debut of a bitcoin spot market on CME, a global derivatives giant, as the current bull run is particularly driven by institutions, who prefer to trade on regulated avenues,” Markus Thielen, founder of 10x Pesquisa, said.

UPDATE (May 16, 07:20 UTC): Adds additional details.

UPDATE (May 16, 08:19 UTC): Adds Coinbase in sixth paragraph.

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