The demand for cryptocurrencies among active traders is soaring as the volumes of crypto contracts for differences (CFDs) at retail broker Axi almost doubled to reach almost $12 billion in January, Finance Magnates has learned. The brokerage handled about 70,000 crypto trades every week.
Axi was handling crypto volumes between $1 billion and $2 billion for most of the months in 2023. However, the volumes surged dramatically last December to rise up to $6 billion.
ETF Effect?
The rise in crypto volumes on Axi echoed the sentiment towards the anticipation and thereafter, the approval of spot Bitcoin exchange-traded funds (ETFs) in the US.
The price of Bitcoin remained highly volatile in the last couple of months. Before the approval of 11 spot Bitcoin ETFs by the US regulator, the fiat value of the cryptocurrency touched $48,000. However, that rally could have been more sustainable, as the Bitcoin price dropped shortly after the official approval for the ETFs was approved.
The initial net inflows into the Bitcoin ETFs did not meet the expectations of many analysts, and on top of that, Grayscale’s Bitcoin ETF, converted from a closed fund, witnessed a massive outflow. However, gradually, investors started to show interest in the instruments, which the inflows into these ETFs can confirm.
Bitcoin ETF Flow – Day 12
All data out. Strong day, with $255m net inflow overall pic.twitter.com/XPQNz496gj
— BitMEX Research (@BitMEXResearch) January 30, 2024
The Rising Demand for Crypto CFDs
The Australia-headquartered broker offers only crypto CFDs with “30 of the most popular cryptocurrencies,” including Bitcoin, Ethereum, Litecoin, Ripple, and Bitcoin Cash. These are derivative instruments and allow traders to take either long or short positions with the underlying digital assets.
Axi offers crypto CFDs under two of its entities, one regulated in Australia and the other incorporated and authorized by the regulator in St Vincent and the Grenadines. While the broker offers leverage of up to only 2:1 to its clients under the Aussie entire, the offshore unit offers up to 200:1 leverage, as seen on the Axi website. The low leverage under the Aussie unit is due to the limitations introduced by the country’s financial services regulator in 2021.
The UK-regulated unit of Axi does not offer cryptocurrency CFDs, as regulated brokers in the country cannot offer such leveraged crypto instruments to retail traders. Axi also holds licenses in New Zealand and Dubai.
Only a Fraction of Crypto Traders Trade CFDs
Many retail brokers offer cryptocurrency CFDs in various jurisdictions. However, hardly any of them reveal volumes and other metrics associated with such instruments. Last October, offshore broker Titan FX revealed handling $2 billion in crypto CFDs volume in a day.
Denmark-headquartered Saxo Bank, which started to offer crypto CFDs in 2021 in some Asia-Pacific countries, generated $2.5 billion in turnover from digital assets only in the first six months. However, the Danish broker did not publicly update those numbers further.
Although crypto CFDs demand on Axi doubled month-over-month, the figure is still a fraction when compared to the volumes on dedicated crypto spot and derivative exchanges. Binance cleared $39.8 billion in crypto derivatives and $14.3 billion in spot volumes in the last 24 hours. In the same one-day window, Bybit and OKX also handled $13.6 billion and $15.4 billion in crypto derivatives, respectively.
The demand for cryptocurrencies among active traders is soaring as the volumes of crypto contracts for differences (CFDs) at retail broker Axi almost doubled to reach almost $12 billion in January, Finance Magnates has learned. The brokerage handled about 70,000 crypto trades every week.
Axi was handling crypto volumes between $1 billion and $2 billion for most of the months in 2023. However, the volumes surged dramatically last December to rise up to $6 billion.
ETF Effect?
The rise in crypto volumes on Axi echoed the sentiment towards the anticipation and thereafter, the approval of spot Bitcoin exchange-traded funds (ETFs) in the US.
The price of Bitcoin remained highly volatile in the last couple of months. Before the approval of 11 spot Bitcoin ETFs by the US regulator, the fiat value of the cryptocurrency touched $48,000. However, that rally could have been more sustainable, as the Bitcoin price dropped shortly after the official approval for the ETFs was approved.
The initial net inflows into the Bitcoin ETFs did not meet the expectations of many analysts, and on top of that, Grayscale’s Bitcoin ETF, converted from a closed fund, witnessed a massive outflow. However, gradually, investors started to show interest in the instruments, which the inflows into these ETFs can confirm.
Bitcoin ETF Flow – Day 12
All data out. Strong day, with $255m net inflow overall pic.twitter.com/XPQNz496gj
— BitMEX Research (@BitMEXResearch) January 30, 2024
The Rising Demand for Crypto CFDs
The Australia-headquartered broker offers only crypto CFDs with “30 of the most popular cryptocurrencies,” including Bitcoin, Ethereum, Litecoin, Ripple, and Bitcoin Cash. These are derivative instruments and allow traders to take either long or short positions with the underlying digital assets.
Axi offers crypto CFDs under two of its entities, one regulated in Australia and the other incorporated and authorized by the regulator in St Vincent and the Grenadines. While the broker offers leverage of up to only 2:1 to its clients under the Aussie entire, the offshore unit offers up to 200:1 leverage, as seen on the Axi website. The low leverage under the Aussie unit is due to the limitations introduced by the country’s financial services regulator in 2021.
The UK-regulated unit of Axi does not offer cryptocurrency CFDs, as regulated brokers in the country cannot offer such leveraged crypto instruments to retail traders. Axi also holds licenses in New Zealand and Dubai.
Only a Fraction of Crypto Traders Trade CFDs
Many retail brokers offer cryptocurrency CFDs in various jurisdictions. However, hardly any of them reveal volumes and other metrics associated with such instruments. Last October, offshore broker Titan FX revealed handling $2 billion in crypto CFDs volume in a day.
Denmark-headquartered Saxo Bank, which started to offer crypto CFDs in 2021 in some Asia-Pacific countries, generated $2.5 billion in turnover from digital assets only in the first six months. However, the Danish broker did not publicly update those numbers further.
Although crypto CFDs demand on Axi doubled month-over-month, the figure is still a fraction when compared to the volumes on dedicated crypto spot and derivative exchanges. Binance cleared $39.8 billion in crypto derivatives and $14.3 billion in spot volumes in the last 24 hours. In the same one-day window, Bybit and OKX also handled $13.6 billion and $15.4 billion in crypto derivatives, respectively.
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- Source: https://www.financemagnates.com//forex/brokers/exclusive-crypto-cfds-volume-on-axi-nears-12-billion-in-january/
