Israel-based exchange platform eToro is struggling to meet demand from cryptocurrency traders, according to an email sent to users earlier today.
“Unprecedented demand for crypto, coupled with limited liquidity, presents challenges for our ability to support BUY orders over the weekend.”
As a result, the platform cautions against “possible limitations of crypto buy orders” and that “spreads on crypto assets can also be much wider than usual.”
– CRYPTO KOALA (@Cryptokoala_Aus) January 13, 2021
EToro has become a victim of his own success. Yesterday, Marketing Director Brad Michelson revealed that in the past 11 days, 380,000 new users opened. accounts and that trading volumes had grown 25 times more than the same period in 2020. As of January 9, eToro had more than 17 million registered users.
Quantum Economics founder Mati Greenspan – former market analyst for eToro – told TBEN that the warning notice was “a symptom of a potential liquidity crisis to come”. He advised users on Twitter against attempting to move funds off the platform.
I wouldn’t suggest anything good at the moment. Buckle your belt.
– Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) January 13, 2021
If eToro implements the announced measures, users will be limited on their maximum exposure per cryptocurrency and will potentially be unable to place new buy orders. Greenspan explained that this simply means that some users “might need to wait to buy.”
Last week the exchange restricted European users from margin trading due to increased market risks and increases the minimum deposit amount of 400% to $ 1,000 to try and get the best out of new user registrations.
Other exchanges are also seeing an increase in trading volumes, with Coinbase’s daily volume reaching $ 9.5 billion on January 12, up more than 50% from its previous record of $ 6.5 billion. January 9. Binance also broke its high of $ 23.7 billion, registering more than $ 30 billion on January 12.
It is only a matter of time before other exchanges start to run into liquidity problems, Greenspan believes, saying it is “very likely” that this will happen on other platforms in the world. the near future.
Concerns over the limited supply of available Bitcoin have risen to the fore over the past six months, with investment giant Grayscale taking Bitcoin at an alarming rate. The company now has $ 20 billion under its control as its Bitcoin (BTC) buys nearly three-to-one mining output in December 2020.