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The CME’s transition to continuous derivatives trading may hasten the movement of institutions away from conventional crypto exchanges, as stated by the Chief Commercial Officer of XBTO.
Bitcoin’s price discovery is transitioning to Chicago. (CoinDesk Archives)
Key points:
- Derivatives linked to cryptocurrencies, such as ETF-based options and futures, might match or exceed the trading volumes of spot transactions on major global platforms.
- As derivatives trading expands on regulated platforms, the pricing of volatility in U.S. markets could increasingly influence the global valuation of bitcoin.
- This transition would further centralize price discovery within regulated futures markets, amplifying their impact on the wider crypto landscape.
Bitcoin , once celebrated as an anti-establishment investment and counter to Wall Street, may now be influenced by sharp traders from those same environments.
Trading for the leading cryptocurrency is consistently moving towards CME Group, and the exchange’s transition to 24/7 derivatives trading later this year may solidify its status as the primary venue for institutional crypto risk.
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This change eliminates one of the few remaining advantages that crypto exchanges held: continuous market access.
“You will see more conventional hedge fund managers entering the asset class, as they will have the ability to trade on instruments they are familiar with, without needing to upgrade their technology or alter their strategies,” Karl Naim, Chief Commercial Officer at XBTO, explained to CoinDesk. “Why would they want to take a counterparty risk from an unknown entity?”
CME already dominates regulated bitcoin futures markets in terms of open interest, and its contracts support a significant portion of the hedging activities associated with U.S. spot ETFs. However, until now, trading has halted over the weekend, creating the well-known “CME gaps” and preventing institutional investors from adjusting their positions while offshore exchanges continued to operate.
24/7 trading eliminates that limitation. Institutions that previously relied solely on exchange-traded funds (ETFs) or avoided weekend exposure will now have the opportunity to hedge at all times, thus narrowing the arbitrage opportunities between prices for regulated futures and offshore perpetual swaps.
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As these gaps vanish, so does the necessity for large allocators to maintain exposure on crypto exchanges merely for access. For institutions that emphasize regulatory clarity and established clearinghouses, CME starts to appear less like an alternative and more like the primary choice.
Even executives from crypto exchanges recognize this trend. In January, OKX President Hong Fang noted in a CoinDesk op-ed that trading in crypto derivatives might one day rival or even exceed spot volumes on major global exchanges, further strengthening U.S. regulated volatility markets as a key anchor for bitcoin price discovery worldwide.
Institutions leading the way
According to Naim, this shift signifies a more extensive change in how capital flows into bitcoin. What initially arose as a grassroots movement by retail traders seeking BTC as an alternative to Wall Street has reversed, with traditional institutions now in control.
“Currently, we engage with numerous sovereigns and institutions. They gravitate towards what they understand,” he remarked, referring to allocators who first encountered the asset via spot ETFs before contemplating more intricate strategies.
With institutional positioning gaining significance, bitcoin’s short-term trajectory increasingly mirrors global risk sentiment.
“If [Trump attacks Iran], we will undoubtedly witness a risk-off scenario,” Naim stated, alluding to a potential U.S.-led forced regime change in Iran. “Gold has already begun to rally. Equities will decline. Bitcoin will also drop.”
In this context, bitcoin functions less as an independent crypto trade and more as a macro asset, valued alongside equities and commodities rather than in isolation.
Naim recognized the irony.
“Bitcoin was fundamentally about decentralization,” he noted.
However, as institutional capital increases and liquidity consolidates within regulated clearinghouses, the surrounding infrastructure of the asset is becoming more centralized — since institutional investors pursue risk assets, not risky platforms.
