Professional market makers are coming to crypto ETPs trading in Europe after volumes surge, especially in Germany’s BTCetc.
“As a market maker, it is a great market to be in due to the arbitrage involved,” said Stefan Kaba-Ferreiro, head of trading at GHCO, before adding:
“Previously, liquidity providers could make $200 spread on a single bitcoin trade compared to mere basis points in the ETF ecosystem but this has since come down due to increasing liquidity in the market.”
GHCO describes itself as one of the fastest-growing liquidity providers specializing in exchange traded funds with it operating in over 1500 ETFs.
Speaking to an industry paper Ferreiro said they had been tapped by the Swiss bank Seba, which says it combines the new financial world of digital assets with traditional banking.
GHCO is to start market making for crypto ETPs next month as it continues discussions with a number of market participants.
“For us at GHCO, it is about building the foundations now so if this space blows up we are in a good spot in terms of having the connectivity and being linked up into the exchanges of tomorrow,” Ferreiro said, adding:
“Unlike traditional markets, there are many different exchanges. For example, if someone executes a big order in South Korea and we are not plugged into that exchange then this can lead to information asymmetry.”
This is the first time a professional market maker focusing on traditional markets enters this space as far as we are aware not least because the crypto stocks offerings are still very new and have just began taking shape.
They operate in a vastly bigger market than cryptos, with global stocks estimated at $100 trillion and growing.
Suggesting bitcoin is beginning to tap into the biggest market, with new players laying new infrastructure as crypto goes next level.
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