Bitcoin in Focus As CME Reportedly Plans to Offer Spot Trading in the Cryptocurrency

Bitcoin (BTC), the largest cryptocurrency by market capitalization, remains in focus Thursday morning after the Financial Times reported that futures exchange CME Group (CME) plans to launch spot Bitcoin trading. The news comes a day after the digital asset logged its best one-day performance since March 25 after softer-than-expected inflation data.

Under the proposed plan, Chicago-based CME would run the spot trading business through the EBS currency trading venue in Switzerland, a platform that has comprehensive regulations relating to trading and storage of crypto assets, people with direct knowledge of the talks told the FT. 

CME, which already offers a range of Bitcoin and Ether derivative products, has held discussions with traders who want to deal cryptocurrencies through a regulated marketplace, the sources said, though they noted no arrangements had been finalized.

The move would allow investors to execute more complex Bitcoin trading strategies involving both spot and futures markets, such as basis trades. These work by borrowing money to sell futures while buying the underlying spot asset and profiting through the spread differential between the two.

News of CME offering spot Bitcoin trading comes after the cryptocurrency gained more than 7% on Wednesday after weaker-than-expected consumer price index (CPI) figures eased concerns that persistent inflation could scuttle interest-rate cuts expected later this year. Bitcoin, like other risk-on assets, remains highly sensitive to rate movements as elevated yields make safer assets, such as U.S. Treasurys, more attractive to investors.

Monitor These Price Levels Amid Close Above 50-Day MA

Bitcoin’s price has struggled to gain upside momentum since breaking down from a symmetrical triangle in early April, with investors promptly selling into any countertrend rallies over the past month. However, in a sign sentiment may be swinging back in favor of the bulls, Monday’s rally, which occurred on the highest trading volume in two weeks on Coinbase, saw the legacy cryptocurrency close above the closely watched 50-day moving average (MA). 

Looking ahead, a move higher from these levels could set the stage for Bitcoin making another attempt at its $73,835.57 all-time high (ATH) set in March this year, while a failure to hold above the 50-day MA could see the bears regain control and the price fall to longer-term support around $52,500.

Bitcoin was trading at around $66,400 at 8:30 a.m. ET.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.