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Chicago Mercantile Exchange looks at Bitcoin trading to capitalize on growing market demand

By exploring Bitcoin trading opportunities, the CME can increase its presence in the crypto market and meet customer needs.

Date: 2024-05-16 Author: Marek Stiller
Chicago Mercantile Exchange looks at Bitcoin trading to capitalize on growing market demand

TheChicago Mercantile Exchange (CME) plans to launch Bitcoin trading, looking to capitalize on the growing demand for Bitcoin among Wall Street fund managers this year .

The Financial Timesreported Thursday that the CME is in talks with cryptocurrency traders about offering a regulated market for buying and selling Bitcoin.

The plans are not yet finalized. However, the CME’s potential Bitcoin trading plan marks the Wall Street giants’ continued push into the crypto space. This followed the SEC’s green light in January for Bitcoin ETFs.

According to the FT, CME plans to offer its potential bitcoin spot trading through EBS. This is a Swiss currency trading platform known for its strict regulations on trading and storing virtual assets. A CME Group spokesperson declined to comment on the matter.

Trading on the Chicago Mercantile Exchange to drive “fundamental trades”

According to the FT, adding bitcoin trading to existing bitcoin futures offerings on the CME exchange would open the door for investors to easily execute “fundamental trades.”

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Underlying trading involves borrowing money to sell futures contracts while buying the underlying Bitcoin to profit from the small price difference between the two. The strategy is already a staple in the U.S. Treasury bond market, with much of it taking place on CME platforms.

CME dethrones Binance as institutions get in on the action

CME has become one of the world’s leading Bitcoin futures markets, dethroning Binance. This rise reflects a renewed wave of interest from institutional investors looking to capitalize on Bitcoin’s volatility.

A 2020 study by Bitwise Asset Management found that the CME’s Bitcoin futures market has consistently outperformed the spot market.

In an effort to increase transparency and trust in cryptocurrency trading, CME Group has joined forces with CF Benchmarks. Together, they have developed standardized reference rates and spot price indexes for popular cryptocurrencies such as Bitcoin and Ether. This collaboration provides a clear and reliable picture of the value of cryptocurrencies.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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