Exclusive: eToro Quadruples BTC Trading Volume amid US Election; Pepperstone, Axi See Jump

eToro, which offers both CFDs and physical crypto trading, revealed to Finance Magnates that the total value of the newly opened Bitcoin positions jumped by more than 300% in the first two weeks of November compared to the first two weeks of October. While the volume of crypto CFDs on Pepperstone also jumped over 3 times after the US elections, Axi confirmed doubling its figures.

For both Pepperstone and Axi, the crypto market rally induced by Donald Trump's victory as the 47th president of the United States only boosted the already growing demand for crypto trading on their platforms.

Pepperstone, an Australia-headquartered broker, revealed that its client trading volumes were already increasing into the US election. Axi, on the other hand, experienced a notable volume increase before the US election, from a daily average of over $448 million to more than $892.6 million, representing a 99.23% rise. Following November 10th, volumes further increased by 92% and have remained elevated since then.

It should be noted that eToro's figures combine its CFDs and physical crypto offerings. However, the figures for Pepperstone and Axi are only for crypto CFDs.

A Significant Jump in Open Positions

The open positions on all these platforms also jumped significantly, along with the volume. The number of crypto CFDs positions on Axi increased by up to 13 times compared to pre-US election levels. eToro, which only provided data for open positions for Bitcoin, also witnessed a jump of over 170%.

“[The figures show] that more investors were buying Bitcoin and in much larger amounts,” said eToro’s Crypto Analyst, Simon Peters, adding that “the number of positions closed also rose 100% as investors took profit.”

According to Axi’s Chief Commercial Officer, Louis Cooper, the increase in crypto positions “reflects a clear trend of investors seeking diversification amid uncertainty surrounding traditional asset classes.”

"A Notable Increase in Two-Way Flow"

Bitcoin is not the only cryptocurrency with the volatility. In fact, some other altcoins, especially meme tokens, remained more volatile than Bitcoin.

"We’ve seen some interest in Dogecoin, and Cardano and some of the other coins that have undergone such incredible price shifts since 5 November, however, client activity remains heavily skewed towards Bitcoin," said Chris Weston, Head of Research at Pepperstone.

"Clients are always drawn to increased movement in any market, and while we’ve seen 100%+ moves in the likes of Dogecoin, clients have still been treated to an impulsive rally in Bitcoin, with price gaining 40% post-election. With the leverage offered in crypto CFDs, many don’t necessarily feel the need to push into Doge, as Bitcoin has the movement, the superior liquidity and lower cost to trade (spreads), to effectively trade their strategy."

Furthermore, Pepperstone’s long (vs short) net positioning skew in Bitcoin and crypto is rarely below 70%. While the broker pay 10% on swaps on short positions (held over rollover), its traders are still highly biased to implement strategies that capture upside potential in price.

"Bitcoin and crypto CFDs are geared towards capturing short-term two-way trading opportunities," Weston added, "and as such, we’ve started to see a shift and an increase in traders turning more aggressive and shorting Bitcoin above $90k – with the broadly held thesis that price has run a little too hot, and the band has been pulled too hard, and due to mean revert. However, momentum and trend strategies have been the clear preference, and clients have been attracted to the increased range expansion and strength in the price."

While Axi also observed the usual trend of clients buying and holding, which is expected with Trump coming into office, Cooper added: “There is a notable increase in two-way flow, with many clients choosing to go against the trend, resulting in balanced activity of buying and selling. This indicates a more dynamic trading environment where clients actively manage positions amid evolving market conditions.”

“Conversely, there has been a shift towards longer holding periods for equities, particularly in the technology and energy sectors. The current environment seems to be driving a 'barbell strategy,' where investors are actively trading high-risk assets like crypto while holding onto equity positions that are likely to benefit from Trump’s pro-business policies.”

"Change in Trading Behaviour"

The fiat value of Bitcoin reached a record high last week, fuelled by Trump’s pro-crypto stance. It peaked at $93,400 against the US dollar and trades above $91,500 as of press time.

Demand came from both retail and institutional investors. Michael Saylor-chaired MicroStrategy again poured billions into Bitcoin at its peak value.

As for retail investors, eToro’s Peters said, “Globally, we are also seeing more people register to join eToro and fund their accounts.” For Axi, the surge in clients actively trading cryptocurrencies since the US elections marked a 200% increase.

“This growth highlights the appeal of cryptocurrencies as a speculative asset class, particularly among retail investors looking to capitalise on the latest bull cycle,” added Cooper.

Previously, Finance Magnates reported that crypto CFD trading demand on Axi last March reached $16.7 billion, compared to $7.6 billion in January and $10.4 billion in February.

Pepperstone's Weston also highlighted that the the broker has seen a strong strong interest from prospects and a clear uplift in new client accounts in recent weeks, "which has resulted in significant volume and flow."

"I’m not sure how much of that one can attribute to the US election, as most traders I’ve spoken to couldn’t wait for it to be over," he added. "What matters most is that cross-market price action, range expansion, and volatility have become highly favourable for short-term traders and the general trading environment has seen increased opportunity for traders of all strategies (momentum, swing, mean reversion etc) to cut their craft in."

Rania Gule, Senior Market Analyst at XS.com, another broker offering crypto CFDs, also acknowledged the overall rise in crypto trading demand but did not share platform-specific figures.

“Post-election, there’s been a noticeable change in trading behaviour,” said Gule. “Specifically, users are more inclined towards a buy-and-hold strategy for cryptocurrencies while showing a preference for active stock trading. This indicates a growing interest in crypto as a long-term investment asset, while stocks remain a go-to for shorter-term moves.”

"Operational Challenges Have Naturally Arisen"

Although higher trading activities translate to more revenue for trading platforms, which often charge through spreads, a sudden surge in volume also brings challenges. One key challenge is the load on the trading infrastructure and the limited time to address it.

“With the increased demand for crypto trading, operational challenges have naturally arisen,” Cooper said. “The heightened trading volumes have required us to expand server capacity to ensure platform stability during peak times. We’ve also increased our customer support resources to accommodate the uptick in new users and the associated inquiries regarding crypto trading.”

“Additionally, managing liquidity has become a priority, particularly with the heightened volatility in the market. With more flow and demand for crypto trading, we have had to ensure that we provide the best possible price for our clients. This has resulted in significant work sourcing, onboarding, and testing new liquidity providers in the crypto space to maintain tight spreads and ensure efficient trade execution, even during volatile periods, ultimately enhancing the trading experience for our clients.”

However, eToro, which is also planning to go public, denied facing any challenges with the surge in crypto trading demand.

Pepperstone also did not witnessed any challenges, as Weston highlighted that its "systems have handled the increased flow with ease," adding: "Client fills when executing at market or on market orders have been well received and helped by the extended hours to trade Bitcoin/crypto that limits the gapping risk, while the intraday price action has also been smooth."