e-toro, a leading platform for crypto trading, has informed its clients that they may be forced to set limits to buying orders, especially during the weekend if the upsurge in volatility and demand in cryptocurrencies persists. The company was forced to take this action to mitigate the effects of unusual and continuous buying orders customers are making for Bitcoin and other related digital assets.
e-toro to place limits on buy orders on weekends
Recently, Bitcoin reached its record level of $41,000 before dropping to $30,000. It is now in a consolidation phase. The asset is hovering around $36,000 at present. The unprecedented rise of Bitcoin is 300% of last year’s price. The upswing is not restricted to Bitcoin but extends to other cryptocurrencies. However, this development is the first of its kind since e-Toro started its trading platform business 13 years ago.
The development is in no way favorable to e-toro as a trading platform because it is finding it hard to keep pace with the demand for the digital asset. Besides, most of the major coins are becoming scarce because customers are ever ready to buy the coins as soon as they are mined. To this end, e-toro has announced that it may have to restrict the number of cryptocurrencies a client can buy in a single trade.
The notice circulated by the platform to its customers states that the renewed demand for cryptocurrencies and inadequate liquidity pose threats to the firm’s ability to initiate buy orders during the weekend. Consequently, the company has no choice but to restrict the number of buy orders on weekends.
Since last year, Bitcoin has been on an upward trend. But the COVID-19 pandemic later boosted the asset’s growth as many investors now turn to a once ignored asset. Bitcoin has now replaced the traditional gold as an inflation hedge. Investors seem to have relied on the digital as a store of value and a sort of haven.
Continuous demand for Bitcoin is pushing the price and volatility higher
As new traders and investors keep joining the crypto markets while existing traders are adding to their holdings, the digital asset’s demand and volatility keep surging. Bitcoin has gained more acceptance in the past year than it had gained in a decade ago. Analysts agree that the general sentiment in cryptocurrencies, especially Bitcoin is positive and favorable to digital assets. However, the momentum has now reduced significantly since last week.
The increased volatility and liquidity have led to a power shutdown in some exchanges like Coinbase. The power outage forced the exchange to prevent customers from having access to their funds for a while, leading to tension and uncertainty among customers about Coinbase’s ability and wherewithal to guarantee their funds’ safety.
Unlike the stock markets that open only five days a week and some hours in a day, cryptocurrencies trade 24/7, and volumes always increase heavily during weekends when traders have enough time to interact with the market.
If e-toro eventually sets the buying limit, customers may be prevented from setting new buy orders. Recently, the firm prevented traders in Europe from benefitting from margin to trade cryptos following unending risks in the market.