Blockchain
Coinbase (COIN) Shares Drop 9% on CME Report to Consider Spot Bitcoin Listing
Coinbase shares fell nearly 8% to $202.49 during the U.S. morning hours on Thursday, after a Financial Times reported that the Chicago Mercantile Exchange (CME) may soon offer bitcoin spot trading amid strong customer interest.
Cryptocurrencies rose throughout the day. THE CoinDesk 20 Index, which tracks 20 of the largest digital tokens by market capitalization, is up 0.91% in the past 24 hours. Bitcoin (BTC) rose by half a percentage point, continuing to profit from Wednesday’s better-than-expected inflation report. COIN is up 29% year to date as cryptocurrency prices have increased year to date.
Chicago-based CME, with a history dating back more than a century, is the largest futures exchange globally and a financial powerhouse. Until recently, Coinbase profited greatly from being the most trusted cryptocurrency exchange in the US, but this advantage could change if the CME comes into play.
The ECM was designated by US regulatory authorities as a “systemically important financial market utility,” a designation that means it is subject to more rigorous oversight. Many investors also assume that the designation implies that the government would never let CME fail in the event of financial distress.
CME is already the largest bitcoin futures exchange by open interest in the United States
The exchange said it has held meetings with traders who want to trade bitcoin on a regulated market, people familiar with the matter told the Financial Times.
A common reason traders don’t want to touch digital assets is a lack of trust in cryptocurrency exchanges, especially after a number of bad players have been exposed in recent years, including the once-popular cryptocurrency exchange FTX.
Recently launched spot bitcoin exchange traded funds (ETFs) have offered traders a safer way to invest in the token, which over 500 institutions have taken advantage of in just the first three months of existence, committing over $10 billion into the funds alone. The rest, more than $40 billion, came from retail traders.