CME, the world's largest futures exchange, plans to launch Bitcoin trading

By Hannah Perez

The world’s largest options and futures contracts exchange moves towards physical Bitcoin. It is considering competing with platforms such as Coinbase and Binance to meet the demand for Bitcoin spot trading.

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World’s largest futures exchange moves to spot Bitcoin
CME considering offering physical Bitcoin trading operations to clients
It could compete with platforms like Binance and Coinbase
The Chicago Stock Exchange seeks to meet the growing institutional demand for Bitcoin

Chicago Mercantile Exchange (CME), the global derivatives market leader, is contemplating the idea of offering derivatives trading operations Bitcoin cash.

With more than 120 years of experience, CME is no stranger to the digital asset sector. The exchange began offering futures contracts Bitcoin in 2017, and has since expanded its range of crypto derivatives products. It also offers futures Ethereum and micro futures of both cryptocurrencies, but has so far stayed away from spot trading.

However, according to a report by Financial Times published this Thursday, things could soon be about to change for the company, now that it is considering addressing the increasing demand for Bitcoin among market participants.

By adding bitcoins spot, the Chicago-based exchange could offer clients an integrated platform including spot and derivatives markets. This could make it competition for exchanges like Binance and Coinbase.

According to the report, which was picked up by multiple news outlets, CME has been holding talks with traders interested in trading bitcoin on a regulated market.

CME’s spot trading business could be managed through the EBS foreign exchange trading venue in Switzerland, the report added. The publication cited several people with knowledge of the matter, but the exchange declined to comment.

Possible competition for Binance and Coinbase

Currently, most of the spot trading of bitcoins is carried out in offshore exchanges such as Binance. Coinbase, the only publicly traded cryptocurrency exchange in the US, ranks third by daily trading volume. It has not achieved full regulation, as it faces a lawsuit from the Securities and Exchange Commission (SEC).

CME, which offers regulated derivatives trading, targets institutional investors who demand strict compliance and due diligence standards. Institutional clients might be more inclined to use CME than exchanges like Coinbasedue to existing relationships and the decades of history of the Chicago Stock Exchange.

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

The news comes as high-profile financial institutions show strong appetite for cryptocurrency-based exchange-traded funds (ETFs). Bitcoin cash in the US

This week it was announced that giant banks and traditional industry entities such as JPMorgan, Wells Fargo and the firm linked to the Rothschild family, to name a few, have invested in the ETFs of Bitcoin in cash that are traded in the US market. And a US state also bought the ETFs.

The CME move could also potentially increase the exposure of Bitcoindriving its adoption among high-profile clients such as hedge funds, family offices, pension funds, banks and more, through regulated and familiar channels.

CME is the options and futures contracts exchange with the highest open interest in the world. (Open interest refers to the number of contracts in circulation).

Bitcoin (BTC) is navigating a new bullish cycle that during March saw it reach new all-time highs of more than USD $73,000. While it has retreated since then, BTC is still in bullish territory above $66,000.

Article by Hannah Estefanía Pérez / DailyBitcoin

Image from Unsplash

WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.