Last week the Financial Times reported that the CME group was planning to launch spot cryptocurrency trading and was discussing the topic with traders. The news came from people privy to the talks rather than the CME itself.
CME competitor, Cboe, entered the spot market in 2021 by acquiring ErisX. Last month, it announced that it was shuttering the spot trading side.
However, the two derivatives exchanges have very different histories with crypto. Cboe launched futures in 2017 at the height of that boom but dropped them after the 2019 crypto crash. In contrast, the CME persisted. The net result is CME dominates the regulated futures market with close to 30,000 in open interest versus less than a thousand for Cboe Digital.
Crypto exchange Binance has dominated futures trading for years, although it is largely unregulated. While the FT reported that the CME has surpassed Binance, we could not verify that. The CME’s open interest is valued at around $2 billion compared to $18 billion on Binance globally, according to CoinGecko. The gap is larger when it comes to daily volumes.
Coming back to spot markets, the focus of CME’s new interest, the institutional space is getting busier. In the U.S., there is EDX Markets, backed by Citadel Securities, Fidelity, and Schwab, which supports Bitcoin, Ether and Litecoin. Deutsche Börse launched its DBDX a couple of months ago.
