In a bull market, cryptocurrencies are gaining popularity. Traditional financial institutions also want a piece of the pie. In addition to the widely welcomed Bitcoin spot ETF by investors and institutions, direct Bitcoin trading has also been put on the agenda.
According to media reports on Thursday local time, the Chicago Mercantile Exchange plans to launch Bitcoin spot trading to meet the needs of Wall Street.
CME declined to comment on this. After the news came out, the overnight market saw a 9.4% drop in the American cryptocurrency trading platform Coinbase.
Investors are concerned that once large traditional financial institutions like CME open Bitcoin trading, the cryptocurrency trading industry may face even more severe competition.
Brett Tejpaul, Head of Institutional Services at Coinbase, responded publicly to this news:
<blockquote>
We are pleased to see another regulated entity seeking to accelerate the adoption of cryptocurrencies in the institutional space. Like Bitcoin ETFs, this will benefit the entire ecosystem, and we look forward to providing Coinbase's top-notch custody and professional services to CME.
</blockquote>
Over the past year, catalyzed by multiple factors such as relaxed regulations, the price of Bitcoin has more than doubled, while Coinbase's stock price has surged by 244% during the same period.
However, the bull market has also attracted more competitors into the cryptocurrency trading field. CME, which already has a leading advantage in cryptocurrency derivatives exchanges, entering the spot trading market is clearly not good news for Coinbase.
Although CME mainly serves institutions and Coinbase mainly serves retail investors - Q1 Coinbase's retail trading revenue was $935 million, far exceeding the institutional revenue of $85 million.
However, the volume of funds from Wall Street institutions is very large, especially with regulatory easing, more and more funds will flow into the cryptocurrency field.
This is also reflected in Coinbase's performance: Although retail trading volume in Q1 increased by 93% compared to the previous quarter, institutional trading volume surged by 105%. Coinbase's institutional business revenue growth rate also exceeded that of consumer business.

Once traditional financial institutions of such massive scale as CME Group open up Bitcoin trading, the cryptocurrency trading industry may face an even more challenging competitive landscape

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Giant downfall? CME Group expresses interest in trading Bitcoin, causing Coinbase to plummet upon hearing the news