Chicago Mercantile Exchange (CME Group) is preparing to introduce spot trading of bitcoin to capitalize on the increased interest from Wall Street fund managers in the cryptocurrency sector this year, according to an FT report. However, the plan is still in the preliminary stages and has not yet been finalized.
Spot bitcoin trading involves the immediate exchange of bitcoin for fiat currency or another cryptocurrency at current market prices, with the transfer of assets occurring instantly.
If this plan proceeds, CME will provide Wall Street investors with another avenue to access digital assets, alongside the 11 spot ETFs approved in the U.S. in January of this year.
FT stated that this move would allow traders to profit from underlying trades, which involves taking advantage of the difference between futures prices and the spot price of the underlying asset.
CME, which operates the world’s largest futures exchange, already offers trading in bitcoin futures.
In fact, it currently leads as the largest bitcoin futures exchange by open interest, while offshore, unregulated Binance dominates the spot market. This new development suggests that Binance could potentially face strong competition from CME.
This move comes after the U.S. Securities and Exchange Commission (SEC) approved direct investments in bitcoin stock funds in January of this year.
Notably, 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 market, and in May 2021, it launched micro-bitcoin futures to meet demand for smaller futures contracts.
In August 2022, CME Group announced the introduction of euro-denominated futures for bitcoin and ethereum. They are settled in cash using the euro reference rate for each cryptocurrency, meaning that the actual bitcoin or ethereum will not change.
