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CME Looks to Take On Binance and Coinbase, Could Launch Spot Bitcoin Trading: Report

Shaurya Malwa, Omkar Godbole
Updated ·2-min read
Scott Olson

  • 10x Research founder Markus Thielen said crypto exchanges may lose business if CME starts offering spot bitcoin trading.

  • CME is one of the top bitcoin futures exchanges by open interest.

Futures powerhouse Chicago Mercantile Exchange (CME) plans to offer spot bitcoin trading to clients as demand for the product mounts among market participants, the Financial Times reported on Thursday.

CME is already the top bitcoin futures exchange by open interest, while offshore, non-regulated Binance dominates the spot market.

The exchange has held discussions with traders who want to trade bitcoin on a regulated marketplace, the FT reported, citing people with direct knowledge of the talks.

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CME's spot trading business could be run through the EBS currency trading venue in Switzerland, the report added.

The exchange did not want to comment on the report.

The spot market will complement the CME’s existing standard and micro futures contracts, which are widely considered a proxy for institutional activity, and help the exchange become more dominant in the crypto market. The CME is already the top bitcoin futures exchange by open interest, while the offshore, non-regulated Binance dominates the spot market. Coinbase (COIN), the only U.S. traded crypto exchange, is No. 3 by daily trading volume.

The availability of the spot market means traders can now set up complex multi-leg strategies involving spot and futures markets in one regulated place. Carry traders are known to short CME futures against long spot market positions on other exchanges or in spot ETFs.

“Crypto exchanges might lose some business with the potential debut of a bitcoin spot market on the CME, a global derivatives giant, as the present bull run is particularly driven by institutions, who prefer to trade on regulated avenues," Markus Thielen, founder of 10x Research, said.

UPDATE (May 16, 07:20 UTC): Adds additional details.

UPDATE (May 16, 08:19 UTC): Adds Coinbase in sixth paragraph.