Bitcoin's Price Discovery Moves to Wall Street

The Anti-Establishment Asset Returns Home

Bitcoin was born to thumb its nose at Wall Street. Now it's moving back to Chicago's trading floors.

The Chicago Mercantile Exchange's shift to 24/7 crypto derivatives trading later this year could cement what's already happening: institutional money is abandoning crypto exchanges for regulated venues. The irony isn't lost on market participants.

"Bitcoin was all about decentralization," admits Karl Naim, Chief Commercial Officer at XBTO. Yet as institutional capital scales, the infrastructure surrounding Bitcoin is becoming increasingly centralized.

Why Institutions Are Fleeing Crypto Exchanges

The math is simple for fund managers: Why take counterparty risk with entities you don't know?

Traditional hedge funds can now trade Bitcoin on instruments they understand, without upgrading their tech stack or moving their trading signals. CME already leads regulated Bitcoin futures by open interest, and its contracts underpin much of the hedging activity tied to U.S. spot ETFs.

Until now, trading paused over weekends, creating the infamous "CME gaps" and forcing institutions to either avoid weekend exposure or maintain positions on offshore exchanges. Round-the-clock trading removes that constraint entirely.

The Numbers Tell the Story

As arbitrage windows tighten between regulated futures and offshore perpetual swaps, the need for large allocators to maintain crypto exchange exposure simply for market access disappears. For institutions prioritizing regulatory clarity and established clearinghouses, CME begins to look less like an alternative and more like the default.

Even crypto exchange executives see the writing on the wall. OKX President Hong Fang wrote in January that crypto derivatives trading could one day rival or surpass spot volumes on major global exchanges, making U.S. regulated volatility markets an even stronger anchor for Bitcoin price discovery worldwide.

From Grassroots to Goldman Sachs

The shift reflects a broader evolution in how capital enters Bitcoin. What began as grassroots activism by retail traders seeking an alternative to Wall Street has flipped upside down. Traditional institutions now call the shots.

"Today we speak to a lot of sovereigns, a lot of institutions. They go for what they know," Naim explains, describing allocators who first accessed Bitcoin through spot ETFs before considering more complex strategies.

With institutional positioning carrying more weight, Bitcoin's short-term direction increasingly reflects global risk sentiment rather than crypto-specific narratives. "If Trump attacks Iran, obviously it's going to be all risk off," Naim notes. "Gold already started rallying. Equities will go down. Bitcoin will go down."

In this framework, Bitcoin behaves less like a standalone crypto trade and more like a macro instrument, priced alongside equities and commodities rather than apart from them.