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The Chicago Mercantile Exchange (CME), a leading bitcoin futures exchange, is reportedly considering offering spot bitcoin trading. This move could significantly impact major players like Binance and Coinbase by providing a regulated trading environment for bitcoin, addressing growing demand among market participants. Interestingly, followed by the news Bitcoin spot ETF trading has surged, reaching $5.65 billion, the highest since March 24th as per Santiment data.
Dominance in Bitcoin Futures
CME is already the top bitcoin futures exchange by open interest. In contrast, offshore, non-regulated exchanges like Binance currently dominate the spot market. The introduction of spot trading at CME would allow traders to execute complex strategies involving both spot and futures markets within a single regulated platform.
According to Markus Thielen, founder of 10x Research, the launch of CME’s spot bitcoin trading could shift business away from existing crypto exchanges. He notes that institutional investors who prefer trading on regulated platforms drive the current bull run.
Strategic Discussions and Plans
The Financial Times reported that CME has engaged in discussions with traders who are keen on trading bitcoin on a regulated marketplace. The new spot trading operations might be conducted through Switzerland’s EBS currency trading venue. Although CME has not officially commented, the potential launch is seen as a strategic expansion to complement its existing future products.
Notably, CME wants to add spot trading to its futures contracts, which big investors are using at present. This could make CME even more important in the crypto world, drawing in more big investors.
Market Reaction
In addition to the 11 spot bitcoin exchange-traded funds approved in January, the CME’s spot bitcoin trading would give Wall Street participants another way to acquire digital assets. Coinbase and Binance offer spot trading, which entails exchanging bitcoin for fiat or other cryptocurrencies. Since January, spot bitcoin exchange-traded funds have drawn $12.15 billion in net inflows, pushing bitcoin’s value above $73,000 in March. Bitcoin is at $65,995, up 6.72% in 24 hours.
Overall, the crypto market is positive due to institutional involvement and regulatory changes.