Europe’s Top Speed Trading Firm Flow Traders Join the Crypto-Economy.
This week one of Europe’s largest speed trading platforms and exchange-traded fund (ETFs) dealers, Flow Traders NV, announced the firm is entering the cryptocurrency space by offering bitcoin and ethereum exchange-traded notes (ETNs) to its clientele.
The Amsterdam market maker, Flow Traders, provides liquidity to its customers by providing traders bid and offer prices for Exchange Traded Products (ETPs). 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. Now the trading platform has announced it’s entering the cryptocurrency space by providing customers ethereum and bitcoin ETNs. According to Flow Trader’s Co-Chief Executive Officer Dennis Dijkstra, the company’s trade volumes have “dramatically increased.”
“People underestimate cryptography”, “It’s big, and it should be regulated very soon, market participants are much more professional than people think, institutional investors are interested, we know they are because we receive requests.”, explains Dijkstra during an interview on July 6.
Speed trading otherwise known as high-frequency trading (HFT) is a technique that uses algorithmic swaps to trade products at high speeds, and fast turnover rates. Typically HFT operations trade extremely large volumes of trades which in turn makes up the low margins offered by the exchange. Flow Traders is not the first high-speed trading company that’s entered the cryptocurrency ecosystem. Five well-known HFT dealers Tower Research, Susquehanna, Jump Trading, DRW Holdings, and Hudson River are selling cryptocurrency products to clients as well. The proprietary trading firm DRW Holdings claims its been swapping cryptocurrencies since 2014.
“What surprises me is how polarizing bitcoin is”, “Everyone has a point of view about bitcoins, while with other asset classes you care or do not care,” said Bobby Cho, head of over-the-counter sales at the subsidiary. OTC of DRW, Cumberland Mining.
Flow Trader’s Dijkstra details that the firm has been hedging its bitcoin (XBT) and ethereum ETNs with CME Groups and Cboe’s XBT products. The XBT provider’s managing director at Coinshares Ltd., Laurent Kssis, says with firms like Flow Traders purchasing ETNs they continue to see steady institutional demand for their cryptocurrency exchange-traded notes.
“With the growing interest of institutional clients willing to invest in digital assets, I can see why so many proprietary businesses are focusing on this new asset class,” Kssis added.
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