Retail forex and CFDs brokerage Deltastock today announced that it is temporarily hiking margin requirements on all cryptocurrency instruments. The move is dictated by a stunning rise for Bitcoin quickly followed by a swift crash. Other brokers have already started taking precautionary measures.
Today’s rollercoaster ride proves that Bitcoin isn’t for the faint of heart anymore. It has been a rather eventful 24 hours for the Bitcoin market. A couple of hours ago, the digital currency set a new all-time high at around $11,500. Maintaining the level has proved to be a lot more difficult than overtly excited investors anticipated. In fact, the price has since dropped by nearly $3000 to a low of around $8500.
Bitcoin crashed again to below the psychological milestone of $10,000, briefly broke $9,000 and rebounded to around $10,000 again just a few hours ago. By the time you read this Bitcoin may have recovered higher, or flash crashed even lower.
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Although the market could have expected that the massive price gain from recent days couldn’t go on without any form of correction, the sharp dip in the past several hours wasn’t exactly what most people had planned for.
Bitcoin loyalists may be quite pleased with such a dip, as it allows them to sell high and buy back at a lower price. However, brokerage heavyweights are already voicing their concerns about an asset with a limited ability to hedge against their exposure to risks, as Finance Magnates reported earlier today.
In a bid to help protect its clients and its book, Deltastock is taking steps to more than double its margin requirements of multiple crypto offerings. The brokerage will increase its margins on Friday, December 1 at 09:00:00 EET. The changes will last until the market settles down from the abrupt fluctuations in recent days.
Given the seismic volatility, traders also warned against the potential for overexposure to the market and against potentially illiquid markets. Deltastock is altering its margin requirements from 20 percent to 50 percent on the following symbols: BTC/USD, ETH/USD, BITCOINETN/se and ETHERETN/se. In addition, the company hiked margins on BCH/USD from 20% to 75%.