CME sees institutional demand for crypto boom again after a long period of “freezing”

Terrence A. Duffy, President and CEO of today’s leading derivatives exchange, the Chicago Mercantile Exchange (CME), said the company has seen demand for its crypto products grow despite difficult conditions. .

CME sees institutional demand for crypto boom again after a long period of “freezing”
CME sees institutional demand for crypto boom again after a long period of “freezing”

In a recent interview with CNBC, Terrence A. Duffy revealed this when asked about the state of institutional demand for crypto futures products offered by the exchange, specifically Bitcoin. The CME CEO believes that the series of challenges in 2022 have not affected the speed of traditional access to cryptocurrencies.

With the Terra ecosystem collapsing in May 2022, FTX going bankrupt in November 2022, and a series of bankruptcies in a contagion that followed, many analysts thought that institutional interest for crypto will decrease significantly. However, Mr. Terrence A. Duffy asserts that the opposite has happened, as demand for CME crypto derivatives products has increased sharply since November 2022.

“It’s interesting to see what’s happening with Bitcoin after we saw what happened late last year and some of the ongoing issues in the industry. The entire crypto industry has been severely impacted, however we saw a spike in transactions that started around November, December 2022 and continues to this day.”

Mr. Terrence A. Duffy believes that customer confidence in CME can also help boost sales of the exchange. Due to the lack of regulatory clarity in the industry, clients may opt for regulated markets such as CME.

“I think people are looking at the regulated market, especially the institutional market. You know, if we want secure crypto transactions, we’ll have to do them on a regulated exchange like CME. So we’ve really seen an uptick in our crypto products so we’re very pleased with that.”

Overall, this is quite a surprising result from CME because according to many statistics recorded from the end of 2022, the derivatives game has cooled down significantly due to Bitcoin’s depressed price action with reasonable trading volume. BTC futures hit a “bottom” in 2 years, leading to a dismal drop in trading volume on CME.

However, the signal of a quick turn in the Bitcoin price reaction when it continuously grew rapidly from the threshold of $ 16,000 to over $ 24,000 in just one month also partly explained the statement of the CME CEO as reasonable. Because CME has been seen as a major catalyst for the price of BTC so far. To understand more about this correlation, readers can learn through the article below:

– See more: What is CME? Things to know about the impact of CME on Bitcoin

Basically CME is seen as the main “gateway” for large institutional traders to start entering the market, gaining exposure to crypto through derivative products like Bitcoin and Ethereum.

Not only that, the strong impact of CME on Bitcoin is also evident through the event of three historic Bitcoin futures ETFs in the US including ProShares Bitcoin Strategy ETF (BITO), The Valkyrie Bitcoin Strategy ETF (BTF). ) and VanEck’s Bitcoin Strategy ETF (XBTF) approved by the SEC in October 2021 are both based on CME price contracts.

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