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Frequent Contributor
Posts: 60
Registered: ‎24-07-2017
Accepted Solution

Digital Currencies - Cryptocurrencies

I welcome that IG offers the chance to trade both Bitcoin and Ether. However, I am disappointed that over the past three days I have been unable to open a long position on Ether thus missing out on gains as there was clearly money to be made with the trend on Ether. 

 

I also think that Ether should be offered in GBP and EUR currencies as well like Bitcoin is. The margin requirement is lower in GBP for Bitcoin than in USD and EUR. One would assume that it would apply to Ether too. 

 

I don't understand why Bitcoin is shown in the two currencies JPY & CNH yet you are unable to trade them either long or short.

 

I think IG needs to be providing more news items and articles about Bitcoin and Ether. I am having to look at Coindesk and Cointelegraph to obtain instant news in the arena of Blockchain technology. 

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IG Staff
Posts: 6
Registered: ‎07-08-2016

Re: Digital Currencies - Cryptocurrencies

Good afternoon, hope you're all having a good Friday!

 

Sorry to hear you're disappointed with this. When we offer Ether we are required to hedge our exposure by purchasing physical tokens in the underlying market. Holding these tokens creates what's known as wallet risk, namely the risk of these tokens being lost, stolen or otherwise misplaced. 

 

We do mitigate this risk by storing our Bitcoin and Ether in offline (cold) wallets with reputable vault providers, but obviously this does not completely erase it. For this reason we have internal limits on how much of each crypto-currency we can hold ( afraid I can't confirm the specific limit). Once a limit is reached we're no longer able to accept new long positions, and you'd therefore receive a rejection message when attempting to do so. 

 

With regards to offering ETH in other currencies, we have considered this, and will keep reviewing it. At present the liquidity on exchanges we use to hedge our ETH exposure is inconsistent, so we're not comfortable offering other ETH pairs at this time. We do intend to regularly review this.

 

If we were to offer these pairs we would in all likelihood maintain the same margin requirement (20% for ETH). When trading bitcoin you'd have a margin requirement on 7.5% across all pairs, XBT/GBP might appear lower due to the numerical price of bitcoin being lower when denominated in sterling, but the minimum trade sizes do reflect this so you should see little difference. 

 

Other bitcoin crosses (such as JPY & CNY) again come up against the aforementioned liquidity issue. It is difficult for use to hedge our exposure against the JPY and CNY, as almost no EU or US exchanges allow for Bitcoin liquidity in sufficient size against these currencies. We used to offer these pairs by internalising the FX rate, but given the increase in demand for bitcoin I'm afraid we're no longer able to do so. 

 

I'd suggest visiting Daily FX (our sister site) for more articles on Bitcoin and/or other Cryptos, as our analyst do put them our from time to time. As before,we are aware of the recent interest in all things crypto, and I will certainly pass on your request. Realistically we won't immediately be able to specialise as much on instant crypto news as other providers, but it's certainly something we can look into.

 

I hope the above all makes sense. I'd be really keen to hear what other crypto currencies you ( and anyone else) would be interested in trading. Please do reply to my comment with any feedback and/or follow up questions.

 

Many thanks and have a great weekend!

 

Ludwik

 

 

 

Frequent Contributor
Posts: 60
Registered: ‎24-07-2017

Re: Digital Currencies - Cryptocurrencies

I def. think that Ether should be available to traders in not only USD but also in GBP and EUR just like Bitcoin. If this could be fed back then it would be very much appreciated.

 

Many thanks for your response. 

IG Staff
Posts: 6
Registered: ‎07-08-2016

Re: Digital Currencies - Cryptocurrencies

Good afternoon!

 

You can currently spread bet ETH in either GBP or USD, although this would of course be using the ETH/USD pair as the price. At present liquidity on non-dollar ETH crosses tends to be limited, so we'd struggle to hedge large positions without disproportionately moving the price.   

 

I do however understand why you're keen to access the others and will certainly feed that back. There's not reason why, if liquidity does improve, we won't be able to offer these pairs in future.

 

Many thanks!

 

Ludwik

 

 

Frequent Contributor
Posts: 60
Registered: ‎24-07-2017

Re: Digital Currencies - Cryptocurrencies

Thanks. It would be great if liquidity did improve and you were able to offer these pairs.