Shares of Coinbase (NASDAQ:COIN) fell nearly 8% on Thursday to $202.49 after the Financial Times reported that the Chicago Mercantile Exchange (NASDAQ:CME) would soon offer spot Bitcoin trading amid strong interest from customers. It fell.
Cryptocurrencies showed an upward trend today, with the CoinDesk 20 index, which tracks the 20 largest digital tokens by market capitalization, rising 0.91% over the past 24 hours. Bitcoin rose 0.5%, benefiting from a better-than-expected inflation report. Despite the decline, COIN is up 29% year-on-year, thanks to the rise in cryptocurrency prices since the beginning of the year.
CME, the world’s largest futures exchange and headquartered in Chicago, has a history spanning over 100 years and is a financial powerhouse. So far, Coinbase has benefited from being the most trusted cryptocurrency exchange in the U.S., but this advantage could be challenged if CME enters the spot Bitcoin trading market.
CME, which has been designated a “systemically important financial markets utility” by U.S. regulators, is subject to more stringent oversight. Many investors believe this designation means the government will prevent CME from failing in a financial crisis. CME is already the leading U.S. Bitcoin futures exchange by open interest.
The exchange is in discussions with traders interested in trading Bitcoin in regulated markets, sources familiar with the matter told the Financial Times. A significant barrier for traders trading digital assets is the lack of trust in cryptocurrency exchanges. Especially after several major failures, including the collapse of once-popular cryptocurrency exchange FTX.
The recent launch of a spot Bitcoin exchange-traded fund has given traders a safer way to invest in Bitcoin, with more than 500 institutions allocating more than $10 billion to the fund within the first three months. An additional $40 billion came from retailers.
Featured Image: Unsplash© Kelly Sikkema
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