The Financial Times reports that the CME Group, the world’s largest futures exchange, is working on a plan to offer spot Bitcoin trading in response to the increasing interest in crypto-based investments. According to three sources familiar with the matter, CME has already engaged in discussions with traders who are eager to buy and sell cryptocurrency on a regulated marketplace. While the plan is not yet finalized, CME aims to conduct its spot trading business through the EBS currency trading venue based in Switzerland.
However, a crypto trading executive expresses skepticism about the derivatives giant operating its Bitcoin trading business in two separate markets, one in Chicago and another in Switzerland. The executive questions how CME would be able to leverage all the available efficiencies in this arrangement.
CME already facilitates Bitcoin futures trading, but the addition of spot trading for the leading cryptocurrency will simplify the process for investors to execute basis trades. Basis trading is a popular strategy among professional crypto traders, involving borrowing funds to sell futures while simultaneously buying the underlying asset and profiting from the price difference.
This development coincides with the growing popularity of Bitcoin exchange-traded funds (ETFs) among wealthy investors. Bracebridge Capital, a Boston-based hedge fund, holds $262 million worth of the ARK 21Shares Bitcoin ETF (ARKB), $81 million worth of BlackRock’s iShares Bitcoin Trust (IBIT), and $20 million worth of Grayscale Bitcoin Trust ETF (GBTC), according to Bloomberg’s senior ETF analyst.
Furthermore, JPMorgan Chase, a banking giant, has disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) that it now holds $760,000 in spot Bitcoin ETFs on behalf of its clients. These investments are spread across BlackRock’s iShares Bitcoin Trust, the ProShares Bitcoin Strategy ETF (BITO), Fidelity’s Wise Origin Bitcoin Fund (FBTC), the Grayscale Bitcoin Trust, and the Bitwise Bitcoin ETF.
Wells Fargo, another major bank, currently holds 2,245 shares of the Grayscale Bitcoin Trust, which are valued at $130,254.
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