European users of eToro are claiming they were given the bum’s rush regarding leveraged crypto positions, which have been abruptly closed in the face of what the trading platform called “extreme market volatility.”
Retail investors in the U.K. and U.S. are barred from buying into crypto derivatives, including financial contracts that allow margin trading where investors need only put up a small amount of the contract’s notional payoff.
Customers of eToro in European countries that allow such trading in contracts for differences (CFDs), were told via email on the evening of Friday, Jan. 8: “If you do not increase the margin to 100%, then the position will be closed at 21:00 GMT today.”
This came with an explainer, saying clients with available balance could keep the positions open by adding funds, while those that don’t have available balance had the option to close other positions in order to free up funds.
However, disgruntled traders have taken to Twitter stating that four hours later eToro closed all leveraged positions on cryptocurrencies, including those that users had attempted to keep open.
“eToro violated the contracts it had agreed with its clients,” said Slavko Vesenjak, an attorney in Slovenia who represents several eToro clients from across Europe. “A four-hour notice before closing all leveraged crypto positions made people wake up in their different time zones, seeing their positions closed.”
Amy Butler, global head of PR for eToro, said the vast majority of eToro’s customers were unaffected by the changes.
“We understand that there are several dozen frustrated clients and we are working hard to resolve their frustrations,” Butler said.
Also last week, eToro, which is said to be planning a $5 billion public listing, raised its required deposit level from $200 to $1,000 in order to better manage overwhelming demand from hopeful crypto traders attracted by rocketing prices.
The temporary decision to increase deposit minimums is because of the surge in demand, said Butler. As far as the removal of leveraged crypto in Europe, this decision was taken “from an internal risk management perspective,” said Butler, adding that it was not related to any potential IPO plans.
“The eToro clients will get their funds. If eToro does not refund them, the Cyprus state will,” said Jurij Toplak, a law professor at Alma Mater Europaea in Slovenia and an adjunct at New York’s Fordham Law.
Toplak said aggrieved eToro customers he’s representing will be approaching the Cyprus Securities and Exchange Commission in a bid to have eToro’s license revoked.
“I guess cryptocurrencies were just going up and eToro discovered they were not able to pay out that much money to the customers,” Toplak said in an interview. “And then they just canceled the contracts.”
Crypto Investment Fund to Sell $750M in Bitcoin for Cardano and Polkadot
Dubai-based cryptocurrency investment fund currently sitting on $1 billion in AUM believes that the value of Cardano and Polkadot will be higher than that of BTC in the upcoming years. Consequently, the fund has announced plans to dispose of $750 million of its Bitcoin holdings and expand its exposure to ADA and DOT instead.
Crypto Fund To Replace BTC With DOT and ADA
FD7 (Fall Down Seven Times) Ventures describes itself as a crypto-oriented investment fund that “invests in entrepreneurs who stand up an 8th time” and has over $1 billion in AUM in various crypto assets. Naturally, those include the two largest – Bitcoin and Ethereum – as well as Cardano, Polkadot, and Cosmos.
According to a company press release, though, the fund plans to rebalance its portfolio by selling off $750 million worth of its Bitcoin exposure over the next month. Instead of holding BTC, FD7 intends to accumulate more of the “rising projects Cardano and Polkadot.”
The firm believes that this increase of altcoin holdings will “better serve the needs of FD7 investors who are looking to diversify their portfolios in the growing cryptocurrency space.”
The fund’s Managing Director had some harsh words to say regarding the primary cryptocurrency following the announcement:
“Aside from the fact that Bitcoin was the first to market and society has given it meaning as a store of value, I think Bitcoin is actually pretty useless.”
In contrast, he highlighted the potential of projects such as Ethereum, Cardano, and Polkadot, which he believes “will be more valuable than Bitcoin within the next few years.”
Ultimately, the statement informed that the fund has already started converting its BTC holdings to ADA and DOT.
Charles Hoskinson Welcomed The News
The press release described the founders of Cardano – Charles Hoskinson and Polkadot – Dr. Gavin Wood as “two of the brightest minds working in the crypto development space today” and outlined their vital role in establishing Ethereum years ago.
The fund’s decision to prioritize its ADA and DOT investments was primarily based on their reputation.
Hoskinson was quick to respond to the news from his Twitter account. Somewhat expectedly, he welcomed FD7 Ventures to the Cardano ecosystem and offered technical assistance if needed.
Wall Street Asset Manager Stone Ridge Files to Add Bitcoin to its Diversified Alternatives Fund
New York City-based asset manager Stone Ridge has filed documents with the US Securities and Exchange Commission on behalf of its diversified alternatives fund to introduce BTC as the seventh investment strategy.
- According to the filing with the SEC, the addition will become effective on April 26th, 2021. However, it doesn’t necessarily mean that the giant asset manager will proceed with its BTC endeavor.
- The filing enables Stone Ridge to receive exposure for its diversified alternatives fund to Bitcoin through put options on BTC futures contracts. Put options allow investors to sell a certain amount at a pre-determined price in the future, but they are not obliged to.
- The Wall Street firm suggested that future allocations in BTC could include putting funds in pooled investment vehicles with exposure to the cryptocurrency.
- SkyBridge Capital’s Anthony Scaramucci also commented on the development and he classified it as a “big deal” that would “open the door for every mutual fund to add Bitcoin.
- Since 2012, Stone Ridge provides services to accredited investors as a registered investment advisor (RIA) and had over $13 billion in assets under management as of late 2020.
- It’s worth noting that Stone Ridge already has substantial connections with the primary cryptocurrency. A Forbes article followed the path that started with staff members purchasing BTC for themselves years ago.
- As the company was struggling with storing their funds, it founded the crypto asset manager New York Digital Investment Group (NYDIG) in 2017. The new endeavor raised over $6 billion in AUM in its four years of existence, and the Executive Chairman, Ross Stevens, recently projected $25 billion by the end of the year.
More Australians Invest In Crypto Than In Gold: Survey
More Australians are investing in crypto than in gold and silver as per the new poll that we discuss today in our cryptocurrency news.
The survey of more than 2000 Australian investors found that cryptocurrency is a more popular investment than gold and silver but still has a long way to go before it nears the shares. The poll was conducted on behalf of the BTC markets in February and found that 12.6% of the Aussie investors hold BTC or other cryptocurrencies compared to the 12.1% who hold the metals. On the other hand, the stock market is a preferred option for investors with 63.6% holding shares directly and 28.8% investing in managed funds or exchange-traded funds. The property was also a great investment while 18% said they invested in collectibles.
Australian crypto investors favor ETH and BTC with 83.2% holding BTC and 42% holding ETH, followed by Ripple, Litecoin, and Bitcoin Cash. The survey shows that about one-third of the crypto investors made their first investment after the COVID-19 induced market crash and the research was backed with a poll revealing that 39% of the respondents found BTC more appealing after the pandemic started.
Despite other cryptocurrencies rallying to a new high in the recent months, More Australians stated that they have no intention of selling their coins with a 31% of them planning to exit after about three years of holding. Of the 49% that are looking to sell or to take profits, one in five investors wants to reinvest. The biggest demographics of Aussie investors were aged between 25-34 following the ones aged between 35-44. Men accounted for 63% of all crypto investors and one in four earned about $100,000 per year.
BTC Markets CEO Caroline Bowler noted that older Australians are also investing in crypto with investors 60+ doubling in number in the past few years to make up to 10% of the client base:
“In the last 12 months, we have seen a shift from 25-45-year-old males to a much broader age group, particularly early retirees who are interested in diversifying their investment portfolio and are catching up with this fastest-growing asset class.”
The research was in line with other polls like the one in December that found almost one in five Australian adults owned crypto last year.
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