Global retail trading platform eToro Ltd. is offering U.S. investors a $500 reward when they open crypto-trading accounts worth at least $5,000.
EToro started marketing the bonus, which runs through January, late last year, just asBitcoin’s value shot up on a historic tear. The digital currencyrebounded on Tuesday from a steep plunge in the latest bout ofroller-coaster volatility.
In just the last 11 days, eToro has opened 380,000 new accounts, and its crypto-trading volume is running 25 times higher than the same period in 2020. Although the company is offering the $500 reward, it’s also reducing exposure to risk in the business.
Last Thursday, with Bitcoin surging to all-time highs and raising the threat of severe losses should it suddenly reverse course, eToro abruptly halted the ability of users to open new leveraged crypto accounts. The company had long allowed customers to lever up their crypto bets up to two times their face value, in accordance with European and U.K. regulations.
The next day, the company also notified existing customers that they must increase their margin on deposit to cover the full value of their positions or have them closed. That move affected about 2% of active eToro users. The Wall Street Journalfirst reported the margin call on Monday.
“We did this in response to the volatility in crypto markets, and we believe it was the most prudent action to take,” eToro spokeswoman Amy Butler said. “Trading with leverage can be highly dangerous in the current volatile crypto-market conditions.”
Founded in 2007, eToro was an early mover in providing crypto trading to retail investors; It started offering Bitcoin accounts in the U.S. in 2018. With more than 17 million registered users primarily in Europe and Asia, the company has shifted its focus in recent years to stock trading andplans to introduce that offering in the U.S. later this year.
On Jan. 6, the U.K. Financial Conduct Authorityprohibited trading firms from selling crypto derivatives such as contracts-for-difference to retail investors. EToro was one of several firms that had used the instrument to make it easy for investors to buy or short Bitcoin and other coins.
This week, the FCA warned consumers that if they buy cryptocurrenciesthey should be prepared to lose all of their money.
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