CME Group Plans Spot Bitcoin Trading Amid Rising Wall Street Demand

The Chicago Mercantile Exchange (CME Group) is gearing up to introduce spot Bitcoin trading to capitalize on the increased interest in the cryptocurrency sector from Wall Street fund managers this year, according to a report by FT.

However, the plan is still in the preliminary stages and hasn’t been finalized yet.

Spot Bitcoin trading involves the immediate exchange of BTC for fiat currency or another cryptocurrency at current market prices, with the asset transfer occurring right away.

If this plan proceeds, CME will provide Wall Street investors with yet another avenue for accessing digital assets, in addition to the 11 spot Bitcoin exchange-traded funds approved in the US in January this year.

FT said that the move would enable traders to profit from basis trades, which involve exploiting the difference between futures prices and the spot price of the underlying asset.

CME Group, which operates the world’s largest futures exchange, already offers Bitcoin futures trading.

In fact, it currently leads as the top BTC futures exchange by open interest, while the offshore, unregulated Binance dominates the spot market. This new development indicates that Binance could potentially face strong competition from CME.

This move comes after the US Securities and Exchange Commission (SEC) approved direct investment 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 run, and in May 2021, it launched micro-Bitcoin futures to meet the demand for smaller-sized futures contracts.

In August 2022, CME Group announced the rollout of euro-denominated Bitcoin and Ether futures sized at 5 Bitcoin and 50 Ether per contract. They are cash-settled using its euro reference rate for each cryptocurrency, meaning no actual Bitcoin or Ethereum will be exchanged.