Europe’s largest trader of exchange-traded funds is moving into crypto, even though its regulator urges consumers and institutions not to buy and sell digital currencies.
Who are these people anyway?
Flow Traders NV, an Amsterdam-based speed trader, is making markets in the first exchange-traded notes based on Bitcoin and Ether, according to Co-Chief Executive Officer Dennis Dijkstra.
“People underestimate crypto,” Dijkstra said in an interview. “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.”
How are they planning to trade crypto?
As a speed trader, the Dutch firm seeks to hedge every trade it makes as quickly as it can. Making markets in crypto has forced its traders to find new ways of hedging. Dijkstra said the new approach had “big spillover benefits” for the company’s nascent foreign-exchange trading business.
More about the firm
The Dutch firm traded 244 billion euros ($284 billion) of ETFs globally in the first quarter, including 143 billion euros in Europe, making it the region’s biggest trader of the securities. Like its main rivals, last year’s dismal trading volumes in its core market prompted Flow Traders to move into new asset classes.
So why are they attracted to cryptocurrencies?
Cryptocurrencies are particularly attractive because speed traders make the most money in the most volatile markets.
“With the growing interest from institutional clients willing to invest in digital assets, I can see why so many proprietary trading businesses are now focusing on this new asset class,” said Laurent Kssis, managing director at XBT Provider.
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