According to a Financial Times report, The Chicago Mercantile Exchange (CME), the world's largest futures exchange, plans to offer spot Bitcoin trading on its platform.

This initiative would provide hedge funds and institutional traders with a regulated venue for Bitcoin trading.

CME is already a leader in Bitcoin futures trading. By adding spot Bitcoin trading, it can offer clients an integrated platform encompassing both spot and derivatives markets.

This integration enables complex trading strategies, such as arbitrage and basis trading, which leverage price differences between the two markets.

Currently, most spot Bitcoin trading occurs on offshore exchanges like Binance. CME aims to provide a regulated alternative for institutional investors who require strict due diligence and compliance standards.

The exchange has reportedly engaged in discussions with traders expressing strong interest in a regulated environment for Bitcoin trading.

This development comes as Wall Street increases its Bitcoin offerings amid growing demand. Several firms have provided access to SEC-approved Bitcoin ETFs earlier this year. 

CME aims to differentiate itself by enabling sophisticated trading strategies beyond simple directional bets.

Institutional funds are more inclined to use CME over platforms like Coinbase due to existing relationships. 

The transparency and trust in CME's decades-long track record are seen as advantages despite its lack of Bitcoin specialization.

By addressing the significant demand from institutional clients, CME aims to enhance its Bitcoin exposure, catering to hedge funds, family offices, pension funds, and others seeking regulated and familiar avenues to access Bitcoin.

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