As if it wasn’t clear enough, we just got another indication that the cryptocurrency markets have soured for price speculators. One of the biggest names in the contracts-for-difference field, IG Group, has revealed that crypto CFD trading is on the decline this year.
Also Read: Monthly Web Traffic for Major Bitcoin Exchanges Falls by Half
Cryptocurrency Trading Fattens IG Group’s Profit Margins
UK-headquartered CFD and spread-betting giant IG Group (LON:IGG) has reported its quarterly results for the three months period which ended 28 February 2018, showing cryptocurrency trading had a great positive impact on its bottom line.
The FTSE-250 brokerage has had a record performance in terms of revenue, reaching a net of £152.9 million which is 30% higher than in the same period in the prior year, and 13% higher than the company’s previous record revenue quarter. Clients trading in cryptocurrencies accounted for an impressive 11% of revenue in the period, up from just 1% the year before. However, IG Group also warned investors that cryptocurrency trading by its clients has slowed markedly since the end of January.
Crypto Mania Has Already Peaked
Unsurprisingly given these results, the company’s following conference call for analysts and investors focused mainly on this issue. CEO Peter Hetherington said: “The crypto mania I think peaked as we approached Christmas, and then if you look at the interest from clients it has fallen away pretty markedly since then. I think whichever measure you track, whether it’s the price of crypto or whether it’s the volume of searches on the internet for crypto trading terms, or any other combination, I think you’d say that the wave has, to a large degree, passed in terms of client interest.”
“And whilst the price of crypto is still volatile by any normal standard it’s a tiny fraction of the volatility that you were seeing in the so-called asset class in the period around Christmas and in January. So, I’d just say it’s stopped moving anything like as much, although it’s still moving a lot, and client interest has fallen away a great deal both from informed and less-informed clients, and as a result the amount that people are trading on the asset class has fallen very considerably since the end of January. That’s not to say it will never restart but I think absent the price of crypto changing a great deal, probably up, it’s not going to be massively significant for the foreseeable [future].”
When should we expect to see the cryptocurrency markets exciting traders again? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, IG Group.
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