Largest European ETF Trader Starts Trading Crypto ETNs

Largest European ETF Trader Starts Trading Crypto ETNs

The Dutch firm Flow Traders NV is the biggest trader of exchange-traded funds in Europe, trading €143 billion worth of ETFs in Q1 of this year. According to a Bloomberg report, the firm has moved into trading cryptocurrency-backed exchange-traded notes. The ETNs they are trading are based on Bitcoin and Ethereum, and they are issued by firms such as Sweden-based XBT Provider.

Given the cryptocurrency market’s copious amounts of volatility, it’s no wonder that a high-speed trading firm such as Flow Traders sees it as an attractive area. To hedge their trades, the firm is using Bitcoin futures contracts offered by CME and CBOE in the United States.

Dennis Dijkstra, the CEO of Flow Traders, says that institutional investors are more interested in the cryptocurrency market than most people think:

“The market participants are much more professional than people think. Institutional investors are interested - we know they are because we get requests.”

While Flow Traders sees the cryptocurrency market as a great opportunity, Dutch regulators are not quite as impressed. Nienke Torensma, a spokeswoman for AFM, the Dutch financial regulation agency, had the following to say about cryptocurrency:

“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.”

The Dutch people, however, appear to have a significant degree of interest in crypto. Google Trends data for the “cryptocurrency” search term shows that the Netherlands is ranked 6th in the world.

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