Frankfurt Turmoil in the crypto market is affecting Boerse Stuttgart’s business. The volume of cryptocurrency transactions fell by almost 60% to 3.3 billion euros in 2022, as the company announced on Friday.
“At the start of the year, few expected such a turbulent and negative market development,” said CEO Matthias Voelkel. The decline in trading volume is strongly correlated to the performance of bitcoin. The most important cryptocurrency has lost about two-thirds of its value since the start of the year.
More recently, the collapse of crypto exchange FTX has grabbed the headlines. FTX founder Sam Bankman-Fried has been indicted for fraud and money laundering.
In Germany, the Stuttgart Stock Exchange is one of the pioneers in the crypto sector. She wants to continue to develop the segment despite the recent turbulence. The FTX case showed how important trust is in the business, says Voelkel. As a regulated company in Germany with a transparent business model, Boerse Stuttgart even benefits from the bankruptcy of FTX when it comes to acquiring new customers.
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“The security and reliability that we stand for becomes more important in times like this – also and above all for private investors.” According to Voelkel, the increases around the FTX bankruptcy were particularly high.
Three small cooperative banks, a savings bank and the online broker Flatex also offer their customers cryptocurrencies via the Stuttgart Stock Exchange. Many other banks are discussing cooperation with the Swabians, but are currently reluctant to implement it.
“On the one hand, we are seeing more reluctance among institutional clients, especially after the events around FTX,” Voelkel points out. “On the other hand, the interest in us has increased significantly.” Some institutes that previously wanted to cooperate with younger, less regulated crypto providers have now approached Boerse Stuttgart. Most would not have given up on their crypto plans.
Experts assume that the crypto crisis will continue for some time. However, Voelkel is convinced that the segment has a future. “In the medium to long term, the trend towards digitalization and the corresponding asset classes will not disappear.”
Problems in classic stock market activity
In addition to crypto, Voelkel also wants to expand the classic stock market business. In 2022, however, the volume of securities transactions on the Stuttgart Stock Exchange fell by around 15% to 91.1 billion euros. The company attributes this to the reluctance of many investors due to market uncertainty.
Deutsche Börse, which is significantly larger, has also recently felt the effects. From January to the end of November 2022, however, the volume of transactions on the spot markets of the Dax group was only slightly lower than the value of the previous year at 1,473 billion euros.
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