Cryptonews People In Crypto

Giant Market Maker Jumps on Crypto Bandwagon

Investing

Trading

Author

Fredrik Vold

Author

Fredrik Vold

Author Profile

Last updated:

June 26, 2023

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

High-frequency traders, known from the world of traditional finance as market makers, are reportedly getting into trading of regulated cryptocurrency derivatives such as exchange traded notes (ETNs).

ETNs are tradable assets normally issued by large financial institutions that tracks the price of an underlying asset, without the holder of the ETN actually owning that asset.

According to Bloomberg, the largest ETN trader in Europe, Amsterdam-based Flow Traders NV, is now making the first move into this market as it aims to profit from high-frequency trading of ETNs based on bitcoin and ethereum.

High-frequency traders create liquidity in markets by employing advanced computer algorithms that buy and sell securities at lightning speeds. While they generally hold an asset for only a very short period of time, these players make large profits from the spread between the buy and sell prices of the asset.

The entry of the new type of player into this market is significant because it brings with it a large increase in both trading volume and liquidity. That could, in turn, open the door for more institutional traders who have been hesitant to get involved so far.

Co-CEO of Flow Traders NV, Dennis Dijkstra, was quoted by Bloomberg as saying:

“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.”