A report disclosed that the Chicago Mercantile Exchange (CME) considered Bitcoin trading. They are trying to overcome the increasing demand for Bitcoin among Wall Street fund managers this year.
According to a Financial Times report, the Chicago Mercantile Exchange is talking to its traders to provide them with a regulated marketplace for buying and selling Bitcoin.
The Chicago Mercantile Exchange (CME) is thinking of taking the initiative for Bitcoin trading. This shows that big Wall Street firms are still interested in cryptocurrencies. This comes after the SEC approved Spot Bitcoin exchange-traded funds in January.
As per the report of Financial Times, CME is planning to start spot Bitcoin ETF trading through EBS. It is a Swiss currency trading platform, with strict rules for crypto assets, storage, and trading.
CME Spot Trading Expected to Boost ‘Basis Trades’
According to the Financial Times, introducing spot Bitcoin ETF trading with existing CME’s current Bitcoin futures would provide investors with good opportunities to conduct ‘basis trades.
Spot traders are involved in borrowing funds to sell their futures contracts while purchasing Bitcoin instantly. This allows them to make a profit from the minimum change in price. This strategy is already used by the US Treasury market, and the same is going to happen on the CME platform
Institutional Interest Shifts: CME Surpasses Binance
CME has grown enough to become the world’s leading market for Bitcoin futures, leaving Binance behind. This increasing interest reflects that the big investors are showing interest in Bitcoin to seek profit.
A study done by Bitwise Asset Management in 2020 showed that the CME Bitcoin futures market is performing better than the regular Bitcoin market, where people buy and sell directly.
CME adopts CF benchmarks in order to maintain transparency and trust in cryptocurrency trading. They worked together to develop standard reference rates for famous currencies like Bitcoin and Ethereum. This step gives a message of clarity and transparency in crypto trading.
