Dutch-based speed trader moves into crypto ETN market

Flow Traders says institutional investors are interested in crypto

Dutch-based speed trader moves into crypto ETN market

Europe’s largest trader of exchange-traded funds, Flow Traders NV, has entered the cryptocurrency market, despite its regulator’s negative stance on cryptocurrency trading, Bloomberg has reported.

The Amsterdam-based speed trader has reportedly become the first company to buy and sell exchange-traded notes based on digital currencies, Bitcoin (BTC) and Ethereum (ETH) ETNs, in particular. The company’s move into crypto has already made a significant impact on the fledgling market for crypto notes, with XBT Provider, an issuer of crypto ETNs listed in Sweden, reporting that the Dutch company has “dramatically increased” trading of its securities in the last few months.

Flow Traders’ co- chief executive officer Dennis Dijkstra indicated in an interview with Bloomberg that the company was seeing interest from institutional investors.

“People underestimate crypto,” Dijkstra said yesterday, as quoted by the newswire. “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.”

Flow Traders decided to make the move into crypto following a tough 2017 that saw trading volumes in its core ETF market taking a big hit. This prompted the company to start looking into new asset classes. Digital currencies are particularly attractive because speed traders make the most money in the most volatile markets, Bloomberg notes.

The move is not supported by the regulator, the Dutch Authority for the Financial Markets, which has warned against crypto trading.

AFM spokesperson Nienke Torensma said in a statement that the watchdog “discourage activities in cryptos both by consumers and professional license holders”, adding that digital currency products were “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,” Torensma said, as quoted by Bloomberg.

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