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Coinbase shares plunged nearly 10% on Thursday as investors worried about new competition from the Chicago Mercantile Exchange (CME) after reports that it is considering offering bitcoin spot trading.
He Financial times said CME Group is meeting with traders looking to trade spot bitcoin ETFs on the exchange. The CME is currently the largest bitcoin futures exchange in the US, and its entry into the bitcoin ETF spot trading market risks undermining a lucrative market segment for Coinbase, the largest crypto exchange from the US
<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”7.9185520361991″>
ONLY IN: The Chicago Mercantile Exchange (CME), which is the world's largest futures exchange, plans to launch twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin trade pic.twitter.com/c5YlgJmr2U
– Simply bitcoin (@SimplyBitcoinTV) twitter.com/SimplyBitcoinTV/status/1791227079905718496?ref_src=twsrc%5Etfw”>May 16, 2024
The CME Group is a highly regulated exchange in the US, categorized as a “systemically important financial market utility.”
Wall Street is flocking to bitcoin
The approval of spot bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January has seen several Wall Street institutions invest in the asset.
BNB Paribas, Millennium Management, Morgan Stanley, JPMorgan, Elliot Capital and Bracebridge Capital are among the major Wall Street giants that own bitcoin ETFs.
Bitwise Chief Investment Officer Matt Hougan bitcoin-etfs-according-to-13f-filings?_gl=1*17sch0n*_gcl_aw*R0NMLjE3MDkyMjM5NDEuQ2owS0NRaUE4NEN2QmhDYUFSSXNBTWtBdmtJVTFEZk12NW9TYnRoWWVGbkhUalppanJDR045TmlsQ2Jkd2x6R1QzZjRmWnRZNlBMUVBnWWFBakswRUFMd193Y0I.*_gcl_dc*R0NMLjE3MDkyMjM5NDEuQ2owS0NRaUE4NEN2QmhDYUFSSXNBTWtBdmtJVTFEZk12NW9TYnRoWWVGbkhUalppanJDR045TmlsQ2Jkd2x6R1QzZjRmWnRZNlBMUVBnWWFBakswRUFMd193Y0I.*_gcl_au*OTU4NjQ5MjI5LjE3MTM0NTY3NTI.&_ga=2.110618821.1166902171.1715629445-825885356.1704924317″ target=”_blank” rel=”noopener”>saying that 563 professional investment firms own $3.5 billion in bitcoin ETFs.
During the first three months of trading, spot bitcoin ETFs attracted more than $10 billion from institutions, while retail traders invested more than $40 billion.
While potential competition from CME is a threat to Coinbase, its entry into the bitcoin spot trading market would also be another indication of widespread cryptocurrency adoption.
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