German Stock Exchange Giant to Launch Crypto Trading — How it Will Affect the European Market
On December 12, Boerse Stuttgart, the second-biggest stock exchange in Germany and the ninth-largest in Europe, said in an official statement that it plans to introduce a crypto trading platform by the second quarter of 2019.
Alexander Höptner, the CEO of Boerse Stuttgart GmbH, stated:
“With its combination of technology and banking expertise, solarisBank is a great partner for us to offer central services along the value chain for digital assets. solarisBank’s Blockchain Factory supports us in taking trading in crypto currencies and tokens to the next level and in setting new standards in transparency and reliability.”
In the upcoming months, Boerse Stuttgart will collaborate with solarisBank to establish an end-to-end infrastructure for cryptocurrencies, allowing investors in the public market to trade digital assets.
What Effect Will it Have on Europe?
Throughout the past five years, despite its lead in infrastructure and talent, Europe has struggled to compete with up-and-coming markets that were rapidly establishing the infrastructure around cryptocurrencies.
Consequently, markets like Singapore, South Korea, and Japan have become the largest cryptocurrency markets in terms of volume and the value of startups based in the three countries, just behind the United States.
According to cryptocurrency market data provider CryptoCompare, less than a year ago, major cryptocurrencies in the likes of Bitcoin and Ethereum both have had most of their daily volumes concentrated in Japan, South Korea, and the United States.
However, over the past several months, possibly influenced by the G20’s call to regulate crypto and the open-minded stance of a handful of European countries such as the U.K. and France toward cryptocurrencies, the euro (EUR) trading pair has started to account for a fair share of both Bitcoin and Ethereum’s volumes.
The development of a cryptocurrency trading platform by Boerse Stuttgart comes in a time during which digital asset exchanges in Europe are starting to record decent volumes that are sufficient compete against established markets.
Currently, apart from regulated fiat-to-crypto trading platforms such as Bitstamp, the European market already has several publicly-traded investment vehicles that allow accredited individual and institutional investors to invest in.
Nasdaq Stockholm in Sweden listed a Bitcoin exchange-traded note (ETN) in 2015, which billionaire investor Mark Cuban invested in Bitcoin with, and Amun Crypto recently released an exchange-traded product (ETP) that tracks the price of five major cryptocurrencies in the market.
On November 18, the SIX Swiss Exchange gave the green light to Amun to operate the first crypto ETP in the country.
At the time, Amun CEO and co-founder Hany Rashwan said that the company might consider expanding to other regions in the long-term, adding:
“We believe Switzerland to be the best jurisdiction for our base and intend, after launching our initial products on the SIX Swiss Exchange, to both launch additional products as well as dual-list across additional geographies and stock exchanges.”
Growing Liquidity
The contentious Bitcoin Cash hard fork on November 15 is generally thought to be the trigger that led the crypto market to suffer a brutal cash.
But, with enough liquidity and volume, analysts said that the market could have been able to absorb the event, preventing digital assets from falling by 80 to 99 percent.
As the infrastructure around crypto strengthens with more regulated options for investors, the liquidity of cryptocurrencies will grow, possibly adding more stability to the asset class.
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