By
Steve Muchoki
April 19th, 2024
Citigroup has intentions of trading Bitcoin futures contracts on the Chicago Mercantile Exchange. The move seems to be in response to an increase in clients requesting more crypto exposure.
Financial services firm Citigroup has intentions of trading Bitcoin futures, reveals a source. According to Coindesk, Citigroup, the New York-based banking leader, has filed paperwork and is waiting for regulatory approval to commence trading of Bitcoin futures contracts on the Chicago Mercantile Exchange. The move seems to be in response to an increase in clients requesting more crypto exposure.
Another anonymous source, an individual familiar with crypto derivatives markets asserts that Citi is recruiting a team specialized in crypto to be based in London. “The team is likely to win approval to begin trading CME bitcoin futures first and then bitcoin exchange-traded notes (ETNs),” the source says.
A spokesperson for the bank told CoinDesk via email:
“Given the many questions around regulatory frameworks, supervisory expectations, and other factors, we are being very thoughtful about our approach. We are presently considering products such as futures for some of our institutional clients, as these operate under strong regulatory frameworks.”
Earlier this year, the Chicago Mercantile Exchange (CME), became the largest Bitcoin futures exchange owing to increased institutional interest. More financial institutions are joining the world of crypto, not by dealing directly with crypto but through cash-settled products that track the performance of investments like various investments. In this case, the tracked investments are cryptocurrencies like Bitcoin and Ethereum.
Examples of institutions going this route are Goldman Sachs and the Bank of America. As we reported in July, Goldman Sachs had started settling and clearing crypto-linked exchange-traded products ETPs) for it European clients with hedge funds. Bank of America is also reported to have taken this move the same month. As far back as February Goldman Sachs, ICAP, JPMorgan and UBS had been purchasing the 21Shares Polkadot ETP for their clients.
Citigroup has about $23.7 in assets under custody. In June the bank introduced a business unit to offer crypto-linked products as part of its wealth management services. According to a Financial Times report, the bank was looking into offering crypto trading and holding services following increased interest by clients.
Citi has been involved in crypto since as far back as 2017. That year, owing to the bull run, the bank’s United Kingdom brokerage platform gave clients access to Ethereum exchange-traded notes. When Bitcoin prices dropped the following year, however, demand for the ETNs dropped too, prompting the bank to put the offering on hold.