The CEO of Zurich-based structured finance specialist Leonteq is still bullish on cryptocurrencies despite a good deal of skepticism from many market participants.
Leonteq CEO Lukas Ruflin has said he does not think interest in cryptocurrencies has peaked and that he expects the derivatives boutique to grow further in this segment in an interview with Swiss financial news website «allnews» (in French only)
In the interview, Ruflin was asked whether the fifteenfold rise in Leonteq’s revenues from cryptocurrencies in the first half of the year was down to temporary hype. «Personally, I don't think interest in cryptocurrencies has hit a short-lived peak,» he said.
Ruflin added that Leonteq had been offered cryptocurrency products very early on in 2017 and that its goal was to offer a much wider range of crypto products. «We now have a solid basis for further growth in these areas.»
Institutional Versus Retail Clients
The CEO said that there was no contradiction between his company’s partnerships with retail banks and it serving institutional clients. Leonteq has started collaborating with PostFinance and some cantonal banks.
«Doing one thing does not prevent you from doing another. In a market environment characterized by very low or negative interest rates, I believe that structured products are very valuable instruments as complements within portfolios.
«They make it possible to optimize the risk/return profile of investments, according to the market scenarios expected by investors. This applies to both institutional and retail clients,» Ruflin said.
Volatility Effect
He also pointed to the counter-intuitive effect of market volatility on investment in structured products, saying that although conditions were more favorable when the volatility of the underlying stocks was high, there was less demand in that scenario because periods of great volatility were also periods of great uncertainty.
This meant clients made fewer new investments «even if in fact the prospects for returns were at their most favorable».
Ruflin told «allnews» the structured products that are most in-demand were yield optimization products, products related to cryptocurrencies or actively managed certificates, which could be dedicated to specific investment themes.
