The Chicago Mercantile Exchange (CME), the world's largest futures exchange, plans to offer bitcoin spot trading on its platform, according to a Financial Times. report.
This move would provide major hedge funds and institutional traders with a regulated venue to trade bitcoin.
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NEW: CME Group, the world's largest futures exchange, plans to launch twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin trade.
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– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1791026415590158806?ref_src=twsrc%5Etfw”>May 16, 2024
CME is already the world leader in bitcoin futures trading. By adding spot bitcoins, you can offer clients an integrated platform that includes spot and derivatives markets.
This allows for complex trading strategies such as arbitrage and base trading that take advantage of price differences between the two.
Currently, most bitcoin spot trading takes place on offshore exchanges like Binance. Offering a regulated alternative, CME targets institutional investors who demand strict compliance and due diligence standards.
The exchange has reportedly held discussions with traders who have expressed strong interest in trading bitcoin in a regulated environment.
The move comes as Wall Street increases its bitcoin offerings amid growing demand. Several companies already provide access to bitcoin ETFs approved by the SEC earlier this year. CME would differentiate itself by allowing sophisticated trading strategies beyond simple directional bets.
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Institutional funds are more inclined to use CME than platforms like Coinbase due to existing relationships. The transparency and trust in CME's decades-long track record outweighs its lack of bitcoin specialization.
By taking advantage of extraordinary demand from institutional clients, CME can significantly increase its exposure to bitcoin, helping to satisfy the appetite of hedge funds, family offices, pension funds and more for regulated and familiar avenues to access bitcoin.
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