The Israeli exchange platform eToro is struggling to meet the demand from cryptocurrency traders, according to an email sent to users earlier today.
“The unique demand for cryptocurrencies, combined with limited liquidity, creates challenges for our ability to support purchase orders over the weekend.”
As a result, the platform warns against “potential restrictions on purchase orders for cryptocurrencies” and that “spreads can also be much wider than usual”.
EToro became a victim of success. Marketing Director Brad Michelson said yesterday that 380,000 new users have opened accounts in the last 11 days, and that trading volumes have increased 25 times over the same period in 2020. As of January 9, eToro had more than 17 million registered users.
Matte Greenspan, founder of Quantum Economics – a former market analyst at eToro – told Cointelegraph that the warning was “a symptom of a potential liquidity crisis”. He advised Twitter users not to try to withdraw money from the platform.
If eToro implements these measures, users will be restricted from accessing the maximum cryptocurrency and may not be able to place new orders. This simply means that some users “may have to wait to buy,” Greenspan said.
Last week, the exchange banned European users from trading on margin due to increased market risk and increased the minimum deposit amount by 400% to $ 1,000 in an attempt to increase new user registrations.
Other exchanges are also seeing higher trading volumes, with Coinbase’s daily trading volume of $ 9.5 billion on January 12, an increase of more than 50% from the previous record high of $ 6.5 billion on January 9. Binance also crossed $ 23.7 billion. summit. After scoring more than $ 30 billion on January 12.
Greenspan believes it is only a matter of time before we see other exchanges begin to face liquidity problems, indicating that it is “very likely” that we will see this situation on other platforms in the near future.
Concerns about the limited supply of bitcoin have emerged in the last six months, as investment giant Grayscale has bought up bitcoins at an alarming rate. The company currently controls $ 20 billion as it buys its Bitcoin (BTC) almost three times as much as mining in December 2020.