eToro has temporarily increased the minimum deposit amount for new users to $1,000.
Cryptocurrency exchange eToro increased its new user deposits from $200 to $1,000 after facing an unprecedented surge in demand for its trading services following Bitcoin’s historic rally.
eToro announced on Twitter that it took the action to protect its 17 million current users. At one point, eToro saw 40,000 new users signed up in a single day at the start of the year.
Everything’s Going Up
The spike at eToro came as Bitcoin rallied above the key psychological level of $20,000 on Dec. 16. The rally was accompanied by a steep increase in trading activity and trading volumes. Google Trends data also shows that BTC search volume is at its highest level since reaching $20,000 in December 2017.
Moreover, mainstream media outlets such as the BBC and CNN started covering Bitcoin on their front pages at the time. eToro says the latest spike in demand was generated mostly from bidding individual retail traders.
Some crypto exchanges now require minimum deposits from new users to cover the costs associated with creating accounts. When crypto first appeared, though, the exchanges did not do this. Traders associated these charges with traditional exchanges.
However, cryptocurrency exchange Bitfinex took similar action in 2018 by introducing a $10,000 minimum deposit. The exchange faced overwhelming demand during the 2017-2018 Bitcoin rally.
A move similar to Bitfinex’s might have helped some exchanges this year. Binance’s servers stalled as Bitcoin broke past $20,000, and the exchange suffered nearly two hours of downtime before trading resumed.
Coinbase has also faced this issue. It has been plagued with outages ever since, and some traders continue to criticize the exchange on social media because of it.
eToro said its educational resources, including its demo-trading accounts, remain unaffected by the new deposit minimum. The move remains until such a time that demand falls or the platform upgrades its capacity.
This goes to show that the cryptocurrency industry can still be surprised by a level of new interest. The growth of institutional investor interest is growing stronger and the industry must prepare for larger waves.