The largest ETF firm in Europe is joining the likes of other multinationals to trade cryptocurrency products. Speaking with Bloomberg, Flow Traders NV Co-CEO Dennis Dijkstra indicated that the company was making markets in exchange-traded notes based on bitcoin and ether. An independent firm offering bitcoin and ether derivatives confirmed that Flow Traders had dramatically increased its holdings in recent months.
Largest ETF firm in Europe
Flow Traders NV is an Amsterdam based high-speed trader. While five other speed traders are currently operating in the USA with regard to cryptocurrency derivatives, Flow Traders NV is reported to be the first firm to disclose its trading on regulated stock exchanges. At the same time, it is ignoring the statements of its regulator which has warned institutions and individuals against the buying or selling of cryptocurrencies. Nienke Torensma, spokesperson for the Dutch Authority for the Financial Markets (AFM), stated that –
“By virtue of its newness and the anonymity it [cryptocurrency] potentially offers, it is very prone to abuse. Given its inability to serve the promised purpose as a currency, we don’t regard it to be an asset class.”
While the AFM is anti-cryptocurrency, it does not have the authority to stop any company from trading regulated securities on a regulated exchange. The AFM prefers a global agreement to regulate cryptocurrencies. But with regulators in different jurisdictions each taking their own approach, a unified framework is unlikely to materialize anytime soon. And this would also be potentially unwelcome for many cryptocurrency enthusiasts.
More signs for institutional investment
Institutional investment is always a positive sign for the crypto sphere. It is often cited as the tipping point where mass adoption of cryptocurrency could become a reality. Cryptocurrency trading is tiny compared to other markets, though the figures do increase every day. According to Dijkstra
“People underestimate crypto…It’s big, and it is to be regulated very soon. The market participants are much more professional than people think. Institutional investors are interested — we know they are because we get requests.”
Dijkstra further highlighted the importance of keeping the regulators on board as opposed to being concerned about the price of cryptocurrency. The Dutch firm has traded over USD 284 billion in ETFs in the first quarter of 2018, making it the largest ETF firm in Europe. Cryptocurrencies are particularly lucrative for speed traders, who make money in volatile markets.
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