Speed Trader moves Into Crypto Bets Opposed by regulators
Largest trader of exchange-traded funds in Europe is moving towards crypto even after the watchdogs warned and compelled consumers and institutions not to trade cryptocurrencies.
According to Co-Chief Executive Officer of Flow Traders- Dennis Dijkstra, an Amsterdam based speed trade, Flow Traders NV is making markets in the first exchange-traded notes based on Bitcoin and Ether. A Sweden based issuer of crypto ETNs, XBT Provider, revealed that the Dutch company has “dramatically increased” trading of its securities in the last few months.
The five big U.S. speed traders are already into crypto markets and they are also exploring the possibilities in cryptocurrency futures and underlying currencies. Amsterdam-based Flow Traders is the first firm around the globe to disclose it’s trading crypto notes listed on regulated stock exchanges.
Publicly traded funds would widen the interests of digital currency as an asset class by facilitating an effortless and economic way of investing in the likes of Bitcoin and Ether.
Dijkstra explained in an interview, “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.”
The energy from Flow Traders’ investors isn’t returned by its regulator, the Dutch Authority for the Financial Markets.
“We discourage activities in cryptos both by consumers and professional license holders,” Nienke Torensma, a spokeswoman for the AFM, said in a statement. “By virtue of its newness and the anonymity it 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.”
Dijkstra further added, “The biggest thing is keeping the regulators on board.”
The firm is the biggest trader of the securities in Europe having traded 244 billion euros ($284 billion) of ETFs globally in the first quarter, including 143 billion euros in Europe. The firm got attracted to cryptocurrencies as they are making most of the profits from the most volatile markets.
Laurent Kssis, managing director at XBT Provider stated, “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.”
Last month has witnessed some intense criticism for the cryptocurrency- The Bank for International Settlements, a central bank for other central banks, outlined three big problems: cryptocurrencies are too unstable, use too much electricity and are vulnerable to manipulation.
AFM, like every other regulator in the country, wants to see a global agreement to regulate cryptocurrencies. “Since cryptos are global in nature, we firmly believe only a globally regulatory response has a chance to be effective,” Torensma further added
Experts reveal that policing digital tokens will be more like a patchwork for some time as the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority and their counterparts in Japan and other major markets each adopting their own approaches and implementing their own regulations.
Image via Shutterstock
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