Etoro Warns Customers to Brace for Suspension of Crypto Buy Orders due to an ‘Unprecedented Demand’
Etoro, a trading and investing platform, has warned its customers to brace for possible limitations on their buy orders this coming weekend. The company says it might be forced to take this and other steps if the anticipated and unprecedented surge in demand for cryptos occurs.
Unprecedented Demand and Limited Liquidity
The Israeli company’s warning follows its curb of European investors’ “ability to trade cryptocurrencies on margin” in the past week. The company had reportedly made this decision in “response to soaring risks in the market.”
Etoro’s notice, which implies that customer demand for cryptos remains high, comes less than a week after the BTC price plunged by more than 20% in less than 48 hours. This plunge caused the value of the entire cryptocurrency market to drop from over $1.1 trillion to $854 billion. Meanwhile, this recent BTC plunge occurred shortly after the crypto set a new all-time high (ATH) of over $41,900.
Still, in its notice, Etoro suggests that demand for bitcoin and other cryptocurrencies is outstripping the supply. In the email sent to customers on Jan. 13, Etoro says:
The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support buy orders over the weekend. In light of this, it may be necessary for us to place limitations on crypto buy orders over the weekend.
Therefore, as part of the steps to curb this unprecedented demand, Etoro says it may set a “maximum exposure per crypto-asset per client.” Additionally, the trading platform might consider “temporarily suspending the ability to place new crypto buy orders.”
Incredible Volatility
Furthermore, one report quotes an unnamed Etoro spokesperson saying “crypto markets are incredibly volatile at the moment and the weekends present the greatest challenges.” This market volatility is epitomized by bitcoin which on Jan. 13 had regained 10% of value in 24 hours of trading.
At the time of writing, bitcoin is trading at about $39,341 and its market capitalization is about $733 billion.
What are your thoughts on Etoro’s limitation plan? You can share your views in the comments section below.
