On the Chicago Mercantile Exchange, Citigroup intends to trade Bitcoin futures contracts. The move appears to be in response to a rise in client requests for additional cryptocurrency exposure.
Citigroup, a financial services giant, plans to trade Bitcoin futures, according to a source. Citigroup, the New York-based banking giant, has filed paperwork and is awaiting regulatory approval to begin trading Bitcoin futures contracts on the Chicago Mercantile Exchange, according to ULTCOIN365. The move appears to be in response to a rise in client requests for additional cryptocurrency exposure.
Another anonymous source acquainted with the crypto derivatives markets claims that Citi is hiring a crypto-focused team to be stationed in London. According to the source, “the team is likely to get approval to begin trading CME bitcoin futures first, followed by bitcoin exchange-traded notes (ETNs).”
In an email to us, a bank spokeswoman said:
“Given the various uncertainties surrounding legal frameworks, supervisory expectations, and other considerations, we’re taking a cautious approach. We’re looking into products like futures for some of our institutional clients because they operate under strict regulatory guidelines.”
Due to rising institutional interest, the Chicago Mercantile Exchange (CME) became the largest Bitcoin futures exchange earlier this year. More financial institutions are entering the crypto realm, albeit through cash-settled products that track the performance of various investments rather than directly dealing with crypto. Cryptocurrencies such as Bitcoin and Ethereum are being followed in this case.
Goldman Sachs and Bank of America are two companies that have taken this path. Goldman Sachs had begun settling and clearing crypto-linked exchange-traded products (ETPs) for its European clients with hedge funds, as we reported in July. This move was also claimed to have been made by Bank of America in the same month. Goldman Sachs, ICAP, JPMorgan, and UBS have been buying the 21Shares Polkadot ETP for its clients since February.
Citigroup is in charge of $23.7 million in assets. The bank launched a business unit in June to provide crypto-linked products as part of its wealth management services. Following rising client interest, the bank was exploring at offering crypto trading and holding services, according to a Financial Times story.
Citi has been interested with cryptocurrency since 2017. The bank’s United Kingdom brokerage platform allowed investors access to Ethereum exchange-traded notes that year, thanks to the bull run. However, when Bitcoin values fell the next year, demand for the ETNs fell as well, causing the bank to halt the offering.