Etoro, a trading and investment platform, has warned its clients to brace themselves for potential restrictions on their buy orders this weekend. The company says it may be forced to take these and other steps if the expected and unprecedented surge in crypto demand emerges.
Unprecedented demand and limited liquidity
The Israeli firm’s warning follows curbing the “ability of European investors to trade on margin in cryptocurrencies” over the past week. The company reportedly made this decision in “response to rising risks in the market.”
Etoro’s notice, implying that customer demand for cryptos remains high, comes less than a week after the BTC price plummeted by more than 20% in less than 48 hours. This dive caused the value of the entire cryptocurrency market to drop from over $ 1.1 trillion to $ 854 billion. This is now recent BTC dive occurred shortly after crypto hit a new all-time high (ATH) of over $ 41,900.
Still, Etoro suggests in his notice that demand for bitcoin and other cryptocurrencies is outstripping supply. In the email sent to customers on January 13, Etoro says:
Unprecedented demand for crypto, coupled with limited liquidity, challenges our ability to support buy orders over the weekend. In light of this, it may be necessary for us to impose restrictions on crypto buy orders on weekends.
That’s why Etoro says, as part of the steps to curb this unprecedented demand, it can set a “maximum exposure per crypto asset per customer.” In addition, the trading platform could consider “temporarily suspending the ability to place new crypto buy orders”.
Furthermore one report quotes an unnamed Etoro spokesperson as saying, “Crypto markets are incredibly volatile right now and the weekends are the biggest challenges.” This market volatility is epitomized by bitcoin that had regained 10% of its value in 24 hours of trading on January 13.
At the time of writing, bitcoin trades at approximately $ 39,341 and its market cap is approximately $ 733 billion.
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