Coinbase Shares Plunge Almost 10% On FT Report That CME Plans To Offer Spot Bitcoin Trading

Updated: 17 May 2024

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Coinbase shares plunged almost 10% on Thursday as investors worried about new competition from the Chicago Mercantile Exchange (CME) after reports it is considering offering spot Bitcoin trading.

The Financial Times said the CME Group is meeting with traders seeking to trade spot Bitcoin ETFs on the exchange. The CME is currently the largest Bitcoin futures exchange in the US, and its entry into the spot Bitcoin ETF trading market risks undercutting a lucrative market segment for Coinbase, the biggest crypto exchange in the US.

JUST IN:🇺🇸 Chicago Mercantile Exchange (CME) which is the world’s largest futures exchange, is planning to launch #Bitcoin trading 👀 pic.twitter.com/c5YlgJmr2U

— Simply Bitcoin (@SimplyBitcoinTV) May 16, 2024

The CME Group is a highly regulated exchange in the US, categorized as a “systemically important financial market utility.”

Wall Street Is Flocking To Bitcoin

The approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January has seen multiple Wall Street institutions invest in the asset.

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

The Chief Investment Officer at Bitwise, Matt Hougan, said that 563 professional investment firms hold $3.5 billion worth of Bitcoin ETFs.

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

While possible competition from CME is a threat to Coinbase, its entry into the spot Bitcoin trading market would also be another indication of mainstream adoption for crypto.