Coinbase shares plunged nearly 10% on the FT report that CME plans to offer spot Bitcoin trading.

adminMay 17, 2024

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Coinbase shares plunged nearly 10% on Thursday as investors worried about new competition following reports that the Chicago Mercantile Exchange (CME) was considering offering spot Bitcoin trading.

The Financial Times said CME Group is meeting with traders looking to trade Bitcoin spot ETFs on the exchange. CME is currently the largest Bitcoin futures exchange in the United States, and entering the spot Bitcoin ETF trading market risks undermining a lucrative market segment for Coinbase, the largest cryptocurrency exchange in the United States.

JUST IN:🇺🇸 The Chicago Mercantile Exchange (CME), the world’s largest futures exchange, is about to launch. #Bitcoin deal 🙌 pic.twitter.com/c5YlgJmr2U
— Simply Bitcoin (@SimplyBitcoinTV) May 16, 2024

CME Group is a highly regulated exchange in the United States and is classified as a “systemically important financial markets utility.”

Wall Street is flocking to Bitcoin

After the U.S. Securities and Exchange Commission (SEC) approved a spot Bitcoin exchange-traded fund (ETF) in January, several Wall Street institutions were seen investing in this asset.

BNB Paribas, Millennium Management, Morgan Stanley, JPMorgan, Elliot Capital, and Bracebridge Capital are among the major Wall Street giants that own Bitcoin ETFs.

Matt Hougan, chief investment officer at Bitwise, said 563 professional investment firms hold $3.5 billion worth of Bitcoin ETFs.

In its first three months of trading, spot Bitcoin ETFs attracted more than $10 billion from institutions, while retail traders invested more than $40 billion.

While potential competition from CME poses a threat to Coinbase, entering the spot Bitcoin trading market would be another indicator of mainstream adoption of the cryptocurrency.