Coinbase shares fell nearly 10% on Thursday as investors worried about new competition from the Chicago Mercantile Exchange (CME) following reports that the exchange was considering offering spot bitcoin trading.
According to the Financial Times, CME Group is meeting with traders seeking to trade spot Bitcoin ETFs on the exchange. CME is currently the largest Bitcoin futures exchange in the United States, and its move into the spot Bitcoin ETF trading market could undermine a lucrative market segment for Coinbase, the largest cryptocurrency exchange in the United States.
Just released: The world's largest futures exchange, Chicago Mercantile Exchange (CME), plans to launch Bitcoin trading
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— Simply Bitcoin (@SimplyBitcoinTV)
May 16, 2024
CME Group is a highly regulated exchange in the United States that is classified as a "systemically important financial market instrument."
Wall Street is pouring into Bitcoin
The U.S. Securities and Exchange Commission (SEC) approved a spot Bitcoin exchange-traded fund (ETF) in January this year, leading several Wall Street institutions to invest in the asset.
Wall Street giants such as BNP Paribas, Millennium Management, Morgan Stanley, JPMorgan Chase, Elliot Capital and Bracebridge Capital all have Bitcoin ETFs.
Bitwise Chief Investment Officer Matt Haugen said 563 professional investment firms hold $3.5 billion worth of Bitcoin ETFs.
In the first three trading months, institutional investors poured more than $10 billion into spot Bitcoin ETFs, while retail traders invested more than $40 billion.
While CME may pose a competitive threat to Coinbase, its entry into the spot Bitcoin trading market would also be another sign of cryptocurrency adoption.
Related reading:
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