Coinbase Shares Sink 9% on Report CME to Consider Listing Spot Bitcoin

Coinbase shares fell nearly 8% to $202.49 on Thursday.

The drop follows a report from the Financial Times that futures exchange CME is considering offering spot bitcoin trading to its customers.

Coinbase shares fell nearly 8% to $202.49 in U.S. morning trading Thursday, following a Financial Times report that the Chicago Mercantile Exchange (CME) may soon offer spot bitcoin trading amid strong customer interest.

Cryptocurrencies were on the rise during the day. The CoinDesk 20 Index, which tracks the 20 largest digital tokens by market cap, increased by 0.91% in the last 24 hours. Bitcoin {{BTC}} is up half a percent as it continues to profit from Wednesday’s better-than-expected inflation report. COIN is up 29% since the beginning of the year, as crypto prices have increased since the beginning of the year.

Chicago-based CME is the largest global futures exchange and a financial powerhouse with a history dating back more than a century. Until recently, Coinbase was profiting greatly from being the most trusted crypto exchange in the US, but that advantage could change if CME comes into play.

CME has been designated a “systemically important financial market instrument” by US regulators; this implies that it is subject to tighter control. Many investors also assume that this designation means that the government will never allow CME to fail in the event of financial pressure.

CME is currently the largest bitcoin futures exchange with open interest in the US

The exchange said it was holding meetings with investors who wanted to trade bitcoin on a regulated market, people familiar with the matter told the Financial Times.

A common reason why investors do not want to touch digital assets is a lack of trust in crypto exchanges, especially after a number of bad actors withdrew from the market in recent years, including the once hugely popular crypto exchange FTX.

Recently launched spot bitcoin exchange-traded funds (ETFs) have provided investors with a safer way to invest in the token; More than 500 institutions leveraged this token in the first three months alone, allocating more than $10 billion to the funds alone. The rest (over $40 billion) came from retail traders.