Bitcoin Sell Side Liquidity Crisis in Effect; eToro to Suspend the Buy Orders Due to ‘Unprecedented Demand’

The firm might limit new crypto buy orders and set a temporary maximum crypto exposure to each client amidst the “increased demand for crypto.”

The sell-side liquidity crunch is real and here.

With a whopping 78% of Bitcoin supply not up for sale while the demand continues to rise with institutions and retail all wanting in, the price is bound to go up.

This supply crunch has started to be seen this week as retail investing platform eToro warned its customers they might face “possible limitations” filing orders.

The firm is seeing so much demand that they are basically “removing the buy button.”

In the email to its clients, the firm gave advance notice of the limitation to crypto buy orders this weekend.

“We are seeing unprecedented conditions in the crypto markets, which have led to increased demand for crypto from eToro users, both old and new,” said the Israeli-British company. The email further notes:

“The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support BUY orders over the weekend. In light of this, it may be necessary for us to place limitations on crypto BUY orders over the weekend.”

These limitations set by eToro extends to temporarily suspending the ability to place new crypto buy orders and setting a temporary maximum exposure amount per crypto-asset per client.

Last Friday, the price of Bitcoin surged to a new all-time high of $42,000. After over a 1,000% run-up from the March 2020 lows, the digital asset recorded a 28% correction to nearly $30,000 earlier this week.

People took this pullback as an opportunity to buy as many dips as possible that the volume on both spot and derivatives platforms broke the records by a monstrous margin.

The 13-year-old firm with a users base of 17 million opened 380,000 new accounts in just the last 11 days, with volume running 25 times higher than the same period last year.

Already, BTC is back above $38,000 with Ethereum and altcoins, especially DeFi tokens having a wild time.

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