The Chicago Mercantile Exchange (CME) introduced its Bitcoin futures contract in December 2017. This was around the same time that Bitcoin (BTC) had reached an all-time high of $19,800, but by late 2018, the price had dropped to $3,100. Investors in cryptocurrencies quickly learned that CME derivative contracts allowed them to make bullish bets with leverage but also enabled them to bet against the price, a practice known as shorting.
Historically, the Securities and Exchange Commission has rejected Bitcoin exchange-traded fund (ETF) proposals due to concerns about manipulation on unregulated exchanges. The growing significance of CME’s Bitcoin futures market might address this issue, and recently, Hashdex has even requested a Bitcoin ETF that relies on Bitcoin's physical trades within the CME market.