Belize-regulated broker MTrading is suspending its cryptocurrency CFD offering until further notice, citing weaker-than-expected demand from its clients.
After assessing the situation, MTrading decided to stop providing its clients with access to crypto CFDs altogether. Traders who still have open positions in any of the affected assets were left with a close-only feature.
MTrading will transfer trades on cryptocurrency CFDs to close only mode, effective today. On February 28, the open positions on these instruments will be closed at the company’s market close price while pending orders are deleted. This basically means that traders will not be allowed to open new trades with cryptocurrency.
“While we believe our trading conditions were very good for crypto trading, the demand for these instruments was not what we had anticipated. We still believe blockchain and cryptocurrency has a place in the future, but for now, better opportunities lie in more traditional instruments,” the company said.
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Cryptos were previously suspended but for different reasons
The cryptocurrency market does not presently have the same appeal that had triggered a feverish interest from retail traders over the last two years.
MTrading and other brokers launched their crypto products when bitcoin was in the middle of a remarkable price surge that saw its value rising 20-fold throughout one year. By December 2017, one bitcoin was worth close to $20,000, but that was the high water mark before the tide turned.
Around this time though, some brokers opted to suspend their offering or restricted trading on cryptocurrencies due to overexposure to its one-sided uptrend. The strong bullish trend incurred by most coins has created risk management issues that have hindered the ability of many companies to sustain the digital currency. As a result, some brokerages stopped offering Bitcoin CFDs until further notice.
At the time, sources with knowledge of the matter shared with Finance Magnates that a number of brokers were materially reducing their exposure to cryptocurrencies.
It is noteworthy that some brokerages that had previously stopped their Bitcoin CFD offerings have already relaunched the product in a better fashion.