The CEO of Panda Trading Systems Maor Lahav, has observed that many brokers are moving towards the cryptocurrency markets. Their reason for doing so is due to the low volatility which has been rising in the FX markets. Maor said this while speaking at the “iFX Expo in Cyprus” on Wednesday.
The Need For Diversification In the Market
According to Lahav, the volume which the market is recording is from ripple clients. What this means, the CEO says is that brokers can be far from low volatility damages if they diversify. At least, they can focus on different asset classes and prevent damages on their brokerage business.
Apart from Lahav, the Invast Global chief commercial officer, James Alexander also took the stage to support him. He spoke on equities and the trading volumes they’re recording from clients. According to James, the company has been noticing that Foreign Exchange trading is not bringing in many retail traders. However, their institutional traders who deal specifically on equities have been trading without ceasing. So, he has also concluded that diversification is what brokers need to survive and boost their brokerage business.
Regulatory Situations In the East
The panelist didn’t stop after discussing the low volatility in the FX markets. They also deliberated on the regulations which are presently affecting the market in Europe. They pointed out that the trading volumes are on the lows due to regulations. For instance, the leverage caps which the European Securities & Markets Authority introduced has affected the trading volumes.
Well, one speaker pointed out that history has the answer which everyone needs to face this current situation. According to the Integral Group founder Harpal Sandu, one country has experienced this issue and brokers didn’t quit. Japan also saw a situation of low volatility for almost three years. The regulators introduced leverage restrictions which slowed down the market for some years. However, after a while, companies came back to operate fully in the market again. Harpal pointed out that many of these firms today have improved in technology & risk management.
Brokers Can Still Succeed Without the European Markets.
On the regulations, the CEO of ZotaPay agreed that maybe the regulations from ESMA would not destroy the retail industry. Avner Ziv pointed out to the others that the brokers who are moving into other markets are succeeding as well. He went further to note that Europe has been the target of many in the industry. However, clients are also succeeding in their business, not in Europe but in other countries. He also stated that countries such as Asia, Latin America, MENA, etc. have also become good grounds for retail traders.
Therefore, even if the businesses in Europe is not moving as everyone expects, brokers can diversify. At least, if they succeed in these other countries, they wouldn’t feel the impact of the ESMA regulations. Surely, they can make up for their lows in the European markets.