Bitcoin frenzy has a new winner as plus500 users spike

2018-01-03 19:00 - Joe Easton, Bloomberg
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London - Facilitators of bets on volatility could be among the biggest winners of the bitcoin bonanza.

Shares in Plus500 soared on Wednesday after the online trading platform provider said demand for digital currency-linked products saw new customer numbers more than double in 2017.

A surge in trading of crypto contracts for difference (CFDs) during the final quarter of the year boosted quarterly revenues to a record, the Israel-based company said in a statement, adding that it expects full-year results to be ahead of market expectations.

Client additions for the year amounted to 246 000, up from 104 432 in 2016.

A jump of 20% was the stock’s largest intraday rise since May 2015. Peers IG Group,  Holdings, CMC Markets and Playtech also advanced.

CFD products provided by companies like Plus500 allow clients to speculate on price movements without owning the underlying asset.

The increase in new customer additions was "very unexpected", and demonstrates how strongly correlated the online trading business is to volatility in underlying markets, according to Justin Bates, an analyst at Liberum Capital who has a buy rating on the stock.

Bates expects Plus500 to further monetise cryptocurrency traffic this year by cross-selling newly acquired customers other products.

He predicts the company will add a further 200 000 customers in both 2018 and 2019, having previously expected it to add just 100 000 in each year.

Plus500 is due to report preliminary full-year results before the end of February.

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