CME Group Plans Spot Bitcoin Trading Amid Rising Wall Street Demand

According to an FT report, the Chicago Mercantile Exchange (CME Group) is preparing to introduce Bitcoin spot trading to capitalize on increased interest in the cryptocurrency sector from Wall Street fund managers this year.

However, the plan is still in preliminary stages and has not yet been finalized.

Local Bitcoin trading involves the immediate exchange of BTC for fiat currency or another cryptocurrency at current market prices, with assets being transferred immediately.

If this plan goes ahead, CME will offer Wall Street investors another avenue to access digital assets, in addition to the 11 Bitcoin exchange-traded funds approved in the US in January this year.

The FT said the move would allow traders to profit from basis trades, which involve exploiting the difference between futures prices and the spot price of the underlying asset.

CME Group, which operates the world’s largest futures exchange, already offers Bitcoin futures trading.

In fact, it currently leads as the top BTC futures exchange by open interest, while unregulated and offshore Binance dominates the spot market. This new development indicates that Binance could face strong competition from CME.

This move comes after the US Securities and Exchange Commission (SEC) approved direct investment in Bitcoin equity funds in January this year.

In particular, CME Group has been a major player in the digital asset market for years. The company debuted Bitcoin futures in December 2017, coinciding with the peak of the bull run, and in May 2021, it launched micro-Bitcoin futures to meet demand for smaller-sized futures contracts.

In August 2022, CME Group announced the launch of euro-denominated Bitcoin and Ether futures with a size of 5 Bitcoin and 50 Ether per contract. They are paid in cash using their Euro benchmark rate for each cryptocurrency, meaning no real Bitcoin or Ethereum will be exchanged.

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