Flow Traders Moves Into Crypto Trading Despite Regulator Warnings

09 July, 2018, 04:30 | Author: Eric Barnett
  • Europe's Largest ETF is Moving Into 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. While five other speed traders are now operating in the United States of America with regard to cryptocurrency derivatives, Flow Traders NV is reported to be the first firm to disclose its trading on regulated stock exchanges.

According to Bloomberg, in the first quarter of 2018 Flow Traders NV traded the equivalent of $284 billion in Euros of ETFs worldwide, including the equivalent of $167 billion in Europe, making the company the largest trader on the "Old Continent".

Nienke Torensma, a spokeswoman for the Dutch Authority for the Financial Markets (AFM), said in a statement that: "We discourage activities in cryptos both by consumers and professional license holders".

Dijkstra said in an interview that people usually underestimate cryptocurrencies. Market participants are much more professional than people think. "Institutional investors are interested - we know they are because we get requests." .


"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", Laurent Kssis, managing director at XBT Provider, said. Flow Traders was founded in 2004 and has become one of the top ETP exchanges in Europe, pulling in over €250 million in revenue per year. An independent firm offering bitcoin and ether derivatives confirmed that Flow Traders had dramatically increased its holdings in recent months.

In order to reduce risk, Flow Traders found different ways of hedging.

Moving forward, Dijkstra believes that publicly traded notes or funds will broaden the appeal of digital currencies as an asset class by providing a straightforward and cheaper way of investing in the the coins.

The plan thus far for Flow Traders is to hedge ETN along with CME or CBOE in terms of futures contracts and will also lower the sluggishness due to an increase in liquidity. Cryptocurrencies are particularly lucrative for speed traders, who make money in volatile markets. She also said that this whole thing is actually prone to abuse, given the asset of the innovation and anonymity that it could offer. A number of banks and financial institutions have recently entered cryptocurrency space in one way or the other. Likewise, Barclays has started providing banking services to Coinbase, the San Francisco based crypto broker.

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