CME Group Aims to Cash In on Bitcoin Fever
CME Group, the world's largest futures exchange, is planning to launch bitcoin trading. This move comes as Wall Street money managers are clamoring to get in on the cryptocurrency action.
According to insiders, the Chicago-based group has been chatting with traders who want to buy and sell bitcoin on a regulated marketplace. If everything goes according to plan, this would mark another major step for big-name
institutions like CME into the digital assets sector - following the SEC's greenlighting of stock market funds that invest directly in bitcoin back in January.
CME hasn't commented yet, but if they do decide to jump into the spot bitcoin trading game, it could be a game-changer. Professional traders and hedge funds would love the opportunity to place "basis trades," which involve borrowing money to sell futures while buying the underlying asset - all without having to worry about
getting taken for a ride by shady operators.
Some of the world's biggest financial institutions have gone from being skeptical about bitcoin to full-on fans, thanks to its crazy comeback from last year's low to hit a record high earlier this year. And even though it's lost some steam since then (it's down one-fifth since its March peak), the exchange-traded funds linked to the
coin are still flying off the shelves.
Hedge funds and pension funds are among the big players that have poured in more than $10 billion of assets into these ETFs, which are run by asset managers like BlackRock, Fidelity, and Ark. Heck, even Larry Fink, CEO of BlackRock, has come out saying he's "long-term bullish" on bitcoin.
CME has already been cashing in on the bitcoin craze, overtaking Binance as the world's largest bitcoin futures market. And with about 26,000 open positions worth around $8.5 billion on its Chicago market - more than double what it was a year ago - it's clear that traders are hungry for a regulated spot trading platform.
If everything goes according to plan, CME would be running its potential spot trading business through the EBS currency trading venue in Switzerland, which has strict regulations governing crypto assets. But some industry insiders have raised questions about whether this would actually help or hinder the company's efforts to build significant market share. Only time will tell if CME can make it work.
