Coinbase’s shares experienced a sharp drop on Thursday, falling by 9% after a report from the Financial Times indicated that the Chicago Mercantile Exchange (CME) may soon offer spot bitcoin trading.
During the morning hours in the United States, Coinbase’s stock fell by almost 8%, settling at $202.49 and marking the second worst performance among crypto stocks of the day.
Summary
The cryptocurrency market
Despite the drop in Coinbase, cryptocurrencies have shown a positive trend. In fact, the CoinDesk 20 Index, which monitors the 20 largest digital tokens by market capitalization, has increased by 0.91% in the last 24 hours.
Bitcoin (BTC) has recorded a half percentage point increase, benefiting from Wednesday’s better-than-expected inflation report and Coinbase’s (COIN) stocks have still marked a 29% increase since the beginning of the year, thanks to the cryptocurrency price rally.
The role of CME in the futures market and the impact on Coinbase stocks
The Chicago Mercantile Exchange, with a history dating back over a century, is the largest futures exchange globally and an important financial institution.
Until recently, Coinbase has dominated the US cryptocurrency market, having a strong and positive reputation. cryptocurrencies.
However, the entry of CME into bitcoin spot trading could drastically change this scenario.
Regulation and Reliability of the CME
The CME has been designated by US regulators as a “major financial market,” a classification that entails more rigorous supervision.
This status implies that the government, strictly speaking, would never allow the CME to fail in case of financial difficulties, thus increasing investors’ confidence. Currently, the CME is already the largest futures exchange for Bitcoin in the United States.
The demand for regulated markets
The CME confirmed that it has held meetings with traders interested in trading bitcoin on a regulated market.
The lack of trust in cryptocurrency exchange platforms, especially after scandals involving players like FTX, has led many traders to seek safer alternatives.
The exchange-traded funds (ETFs) on spot bitcoin, recently launched, have offered a solution, allowing over 500 institutions to invest over $10 billion in the first three months of existence. Another $40 billion has been invested by traders.
Future perspectives and actions on Coinbase (COIN)
The entry of CME into bitcoin spot trading could represent a significant turning point for the cryptocurrency market. The increased regulation and reliability associated with CME could attract a growing number of institutional and retail investors, reducing the competitive advantage of Coinbase.
This change could lead to greater stability and confidence in the crypto market, fostering sustainable long-term growth.
In conclusion, the drop in Coinbase’s shares reflects market uncertainties, in light of the possible entry of CME into bitcoin spot trading.
However, this move could also mark a step forward towards a more mature and regulated cryptocurrency market, opening up new opportunities for investors and strengthening confidence in the sector.
