Why Is CFTC Approval of BTC and ETH Spot Trading a 'Major Event'?

Source: DigitalToday Original Title: Why the CFTC’s Approval of BTC and ETH Spot Trading is a ‘Major Event’ Original Link: https://www.digitaltoday.co.kr/news/articleView.html?idxno=610799

This week, the U.S. Commodity Futures Trading Commission (CFTC) officially approved spot trading for Bitcoin (BTC) and Ethereum (ETH), marking a new turning point for the cryptocurrency market.

This decision carries significant implications in two key areas:

Institutional Recognition Brings Inflow of Institutional Funds

The CFTC’s approval gives Bitcoin and Ethereum the same status as institutional assets like gold, which is expected to attract more institutional investors. At the same time, spot trading on regulated exchanges within the U.S. becomes possible, leading to expected increases in liquidity and decreases in volatility.

The impact of this decision can be understood by looking at the historical example of the gold market. After gold was listed on regulated futures exchanges in the U.S. in the 1970s, liquidity became concentrated, a large influx of institutional investors followed, and gold prices subsequently rose by 4,000%, making it a global investment asset. The CFTC’s decision suggests Bitcoin and Ethereum could follow a similar trajectory.

Addressing Liquidity Outflow Issues

Previously, U.S. investors traded cryptocurrencies on certain compliant platforms, but due to the lack of a regulated spot market, liquidity flowed overseas. According to 2025 data, a leading exchange accounted for 41.1% of global spot trading, far surpassing U.S.-based exchanges. This move will strengthen domestic liquidity in the U.S. and is expected to bring about structural changes to the cryptocurrency market.

Regulatory Preferences of Institutional Investors

With CFTC approval, major institutions such as pension funds, banks, and hedge funds can trade Bitcoin and Ethereum in a standardized, regulated environment. A survey conducted by a compliant platform in partnership with EY-Parthenon showed that 86% of institutional investors already hold or plan to further invest in cryptocurrencies, and prefer regulated markets over overseas exchanges. This decision is expected to accelerate institutional adoption.

Historical Comparison: The Crude Oil Market Example

Looking at the historical case of the crude oil market further illustrates the impact of listing on regulated exchanges. After WTI crude oil futures were introduced in 1983, monthly trading volume grew from 3,000 contracts to 100,000 contracts within a year, and reached 2 million contracts per month by the late 1980s, achieving explosive growth. Today, WTI crude oil sees daily trading volumes exceeding 1 million contracts, clearly demonstrating that regulation is a powerful driver of market growth.

The Outlook for Bitcoin and Ethereum

Following CFTC approval, Bitcoin and Ethereum are likely to experience similar increases in liquidity. As trading activity on U.S. domestic exchanges grows, volatility will decrease and market stability will be strengthened.