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Shares of Coinbase dropped nearly 8% to $202.49 during U.S. morning hours on Thursday. (Alpha Photo/Flickr)Shares of Coinbase fell nearly 8% on Thursday to a price of $202.49.
The drop came after a report from the Financial Times that futures exchange CME was considering offering spot bitcoin trading to its clients.
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Shares of Coinbase dropped nearly 8% to $202.49 during U.S. morning hours on Thursday after a Financial Times report that the Chicago Mercantile Exchange (CME)might soon offer spot bitcoin tradingamid strong interest from clients.
Cryptocurrencies were up on the day. TheCoinDesk 20 Index, which tracks 20 of the largest digital tokens by market capitalization, is 0.91% higher over the past 24 hours. Bitcoin(BTC)was up by half a percent as it continued to profit from Wednesday’sbetter-than-expected inflation report. COIN is up 29% year-to-date as crypto prices have rallied since the beginning of the year.
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 strongly from being the most trusted crypto exchange in the U.S., but that advantage could change if CME comes into play.
The CME has beendesignated by U.S. regulatorsas a "systemically important financial market utility," a designation that implies it's subject to more strict supervision. Many investors also assume that the designation implies the government would never let the CME fail in the event of financial duress.
CME is already the biggest bitcoin futures exchange by open interest in the U.S.
The exchange said that it has been holding meetings with traders who wish to trade bitcoin on a regulated marketplace, people familiar with the matter told the Financial Times.
A common reason for traders not wanting to touch digital assets is the lack of trust in crypto exchanges, especially after a series of bad players were outed in recent years, including the once highly-popular crypto exchangeFTX.
Recently launched spot bitcoin exchange-traded funds (ETFs) gave traders a safer way to invest in the token, which over 500 institutions took advantage of within only the first three months of existence, allocating over $10 billion in the funds alone. The rest, over $40 billion, came from retail traders.
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