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#1 21-05-2021 17:02:10

johnedward
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XTB halts trading of several crypto pairs due to high volatility

XTB halts trading of several crypto pairs due to high volatility


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X-Trade Brokers, better known by its trade name XTB, has closed most of its cryptocurrency contracts for differences (CFDs) instruments, citing high volatility in the digital currency market.

"Due to the extraordinary volatility of the markets and an inability to hedge positions with liquidity providers, we are forced to take the decision to change the availability of certain financial instruments," the Polish broker wrote on its notification .

The broker first stopped accepting new positions in several cryptocurrencies on Friday. The first list includes several cryptos like ETH, XRP, XEM, EOS, NEO, and many more. With the exception of DASH, all of the digital currencies on the list were paired with BTC.

On Tuesday, XTB added two more cryptocurrencies, EOS and Steller, to its list of closed pairs. EOS has gained more than 73% in the past week, while Steller has jumped almost 25% in the same period.

It is not known how long the Polish platform will keep these digital currencies in closed mode.

A liquidity crisis

Placing volatile instruments in closed mode is nothing new in the trading industry. The main concern of brokers is the liquidity needs during the volatility phase. Earlier, many platforms made headlines when they stopped taking new orders for GameStop stocks.

The publicly traded XTB released its financial results for the first quarter of this year last month, reporting a massive increase in quarterly profits. The broker also reported a record increase in the number of new traders and client activity.

At the same time, XTB is expanding its global footprint and aims to penetrate Middle Eastern markets by the first half of this year, establishing itself in the UAE. The president of XTB, Omar Arnaout, however, stresses that the broker could need 1 or 2 quarters to create the value of its brand in this new market.

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