Cryptocurrency Trading Falls In Popularity During COVID-19 Pandemic
In the U.K., cryptocurrency trading has lost its appeal and is now among the least popular trading asset classes as the market wrestles with a coronavirus pandemic, according to a report by the brokerage eToro.
The trading platform says that, in a major change, crypto went from being a leading category to accounting for just 7% of total trades.
Indices have become the most popular asset class, accounting for more than a third of all open positions.
Indices presented the most profound change, eToro says. Once considered a long-term investment option, they have become a short seller’s favorite.
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Short orders on U.S. and European indices became the majority, but this was later offset by some exchanges disabling short orders altogether, the report says — and some indices recovering due to government stimulus packages.
Coming closely after indices are stocks, which make up more than 30% of trades, and commodities, which have kept their proportionate share at around 16%, says eToro.
Data from the company shows short positions have become far more common, almost doubling in their relative number to long orders between January and mid-March.
“Moreover, since many investors would not even consider using short orders, due to their higher risk potential or due to a long-only strategy, this incline indicates that a growing number of people have lost faith in the markets,” the report says.
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