One of the largest and most important traders of exchange-traded funds in Europe is moving into cryptocurrencies. But its regulator warns retail and institutional investors not to buy and sell virtual currencies because of the risks associated to them.
Flow Traders NV Enters the Crypto Market
According to Bloomberg, Flow Traders NV, a company based in Amsterdam, is making markets with the first ETFs based on Bitcoin and Ether. Dennis Dijkstra, Co-Chief Executive Officer of the company, said that the company has increased the trading of its securities in the last months.
During an interview, Dijkstra explained:
“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.”
This information is very positive because it shows a tendency that has been mentioned several times during the last months: institutional investors are ready to enter the crypto world.
But Nienke Torensma, spokeswoman for the Dutch Authority for the Financial markets, recommends to institutional investors and consumers not to invest in cryptocurrencies.
“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,” she explained.
But important financial firms all over the world are trying to enter the cryptocurrency space. For example, Goldman Sachs Group Inc. has decided to set up a digital-asset trading desk. Another important company, Barclays Plc, revealed that is going to provide banking services for Coinbase, one of the most important cryptocurrency firms in the world.
Dijkstra explained that Flow Trades is hedging its trades of cryptocurrency notes with future contracts provided by the CME Group and the Cboe Global Markets Inc. But he did not mention whether the company is using virtual currencies or not to hedge.
At the moment of writing this article, Bitcoin is the most important crypto in the market and it is being traded around $6,500 dollars.
