Frankfurt The Frankfurt trading platform Spectrum will enter the cryptocurrency business on Wednesday. Private investors can then place warrants around the clock on the development of the most popular cryptocurrencies Bitcoin and Ether, as board member Alpay Soytürk told Handelsblatt. “We are the first European trading venue to offer crypto turbos that can be traded 24 hours a day within a regulated environment.”
From his point of view, trading around the clock is particularly important for cryptocurrencies, “because there are always strong price fluctuations there, even at night” – for example when tech billionaire and Tesla CEO Elon Musk tweets about cryptocurrencies again. Spectrum customers could also respond to this late at night or early in the morning.
Turbos are financial instruments with which investors can bet on rising or falling prices of underlying assets with leverage. However, this entails considerable risks: if the underlying falls below or exceeds certain values, so-called knock-out thresholds, the securities become worthless.
Similar and numerous other structured products based on cryptocurrencies have been available from competitors such as the Stuttgart Stock Exchange and the Frankfurt Stock Exchange for a long time. However, these can only be traded there between 8 a.m. and 10 p.m.
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Spectrum wants to offer 20 crypto turbos at the start. On Bitcoin and Ether, customers can bet on rising prices with five products each and on falling prices with five products – each with different knock-out thresholds.
Experts keep warning of major risks in the crypto market, including potential total losses. They advise only investing money in cryptocurrencies that you are willing to lose. “The offer is aimed at a risk-averse audience – at traders who want to benefit from short-term price fluctuations,” emphasized Soytürk. “On the other hand, you can also use the products for hedging, i.e. to protect against short-term price fluctuations.”
Spectrum wants to expand crypto offering
Spectrum is a so-called Multilateral Trading Facility and is regulated by the German financial regulator Bafin. The company started operations in the summer of 2019 and is part of the British financial group IG. It wants to lure customers away from long-established exchange operators with longer trading hours, lower costs and faster processes.
However, well-known brokers such as Comdirect and Consors have not yet joined the Spectrum platform. So far, German private investors have only been able to trade the products through the German broker IG Europe, which, like Spectrum, belongs to IG. All products are issued by the IG subsidiary Raydius.
Spectrum recently gained two external partners in the Italian banks Equita and Intermonte. “More brokers and issuers will be added soon,” announced Soytürk. Before joining Spectrum, he worked for Deutsche Boerse for around five years and for Boerse Stuttgart for two years.
Due to the continued great interest in cryptocurrencies, all trading places are concerned with the question of whether and in what form they want to offer products based on cryptocurrencies. The Stuttgart Stock Exchange, on whose Bison trading platform investors can trade cryptocurrencies directly, is considered a pioneer in Germany.
Crypto investors currently optimistic
The trading places hit a nerve with this: A recent survey published by the US crypto company Coinbase in cooperation with the Blockchain Center of the Frankfurt School of Finance on Tuesday shows that crypto investors in Europe are currently optimistic, although the Market participants had to contend with significant price declines and comparatively high volatility in the first quarter of 2022.
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56 percent of cryptoasset owners surveyed said they plan to increase their crypto holdings over the next 12 months. 33 percent want to keep their stocks, eleven percent said they want to reduce their stocks. “Cryptoassets are thus establishing themselves more and more clearly as a new asset class,” judge the authors of the report, which “is here to stay”.
At the same time, providers of crypto products continue to struggle with the uncertainty of potential customers: A quarter of those surveyed who are currently not investing in crypto currencies gave the reason that they lacked “investment-relevant information”.
“The crypto industry still has a responsibility to better explain cryptoassets and to minimize the hurdles for investors in different areas,” concludes Sascha Rangoonwala, Country Manager Germany at Coinbase. It is therefore important that “the industry provides understandable information, learning opportunities and low-threshold access”.
After starting with products on Bitcoin and Ether, Spectrum is already flirting with expanding its range. “Other cryptocurrencies could follow at a later date,” said Soytürk. “We are already examining some of them.”
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