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CME Group Plans Spot Bitcoin Trading Launch to Meet Wall Street Demand

2 mins
Updated by Ali M.
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In Brief

  • CME Group plans to introduce Bitcoin spot trading to satisfy Wall Street's growing cryptocurrency demand.
  • Discussions ongoing for a regulated Bitcoin marketplace; reflects trend of traditional finance integrating with crypto.
  • Introduction of spot trading at CME aims to enhance investment opportunities through basis trades and crypto buys.
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CME Group, the world’s largest futures exchange, will introduce spot Bitcoin trading, as reported by the Financial Times on Thursday.

This move aims to meet the growing demand from Wall Street money managers for cryptocurrency exposure.

CME Group Plans Bitcoin Spot Trading

The Chicago-based exchange has been in discussions with traders seeking a regulated marketplace for Bitcoin transactions. While the plan isn’t finalized, it marks a significant step in integrating traditional finance with digital assets.

The CME is currently the leading BTC futures exchange by open interest, while Binance dominates the spot market. Though still under consideration, a spot trading offering on CME would allow Wall Street to take a bigger punt on Bitcoin outside ETFs.

CME’s potential spot trading business will operate through Switzerland’s EBS currency trading venue. This venue has stringent regulations for trading and storing crypto assets. However, there are questions about whether CME can achieve significant market share with operations split between Chicago and Switzerland.

“I struggle to see how they would get all the efficiencies available to them”, one crypto trading executive said.

CME Bitcoin futures OI
CME Bitcoin futures OI. Source: Coinglass

Meanwhile, Markus Thielen, founder of 10x Research, suggests that crypto exchanges might lose business if CME enters the spot market. This shift could attract institutions to prefer regulated trading platforms. The future of Bitcoin trading on CME could pave the way for further mainstream acceptance and integration of cryptocurrencies.

Read more: What Are Bitcoin Futures?

Bitcoin’s resurgence from its 2022 low to a record high earlier this year has fueled institutional interest. Despite losing one-fifth of its value since its March peak above $73,000, BTC remains a hot commodity, and exchange-traded funds linked to Bitcoin have become the fastest-growing ETFs ever.

Hedge funds like Bracebridge Capital and pension funds like the Wisconsin Investment Board are among the large investors in Bitcoin. These institutions have invested over $10 billion in vehicles managed by firms like BlackRock, Fidelity, and Ark.

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Shota Oba
After interning at a domestic blockchain media company while enrolled at a university in international relations, he worked as an intern trainee at two foreign crypto asset exchanges. Currently, as a journalist, he focuses on the Japanese crypto asset market, both technical and fundamental analysis. He has been trading crypto assets since 2021 and is interested in economic and social affairs.