Shareholders cash in as bitcoin buzz boosts Plus500

Business News

The hype around cryptocurrencies has drawn more customers to Plus500’s, online trading platform, the company said on Wednesday, with many staying on to trade its products ranging from indices to commodities.

Plus500, a rival to IG Group and CMC Markets, forecast 2018 revenue “significantly ahead” of market expectations and said a regulatory crackdown on spreadbetting in Europe was unlikely to hurt its business.

Retail customers use its platform to trade contracts for differences (CFDs) and Chief Executive Asaf Elimelech said that about 15 percent of the company’s overall revenue in 2017 derived from cryptocurrency CFDs trading.

Interest in cryptocurrencies may start to decline this year in the face of more stringent regulations, Elimelech said, but Plus500 was sufficiently diversified to handle that.

“We also noted that the various customers (of cypotcurrency), and not a small portion, have continued to trade on other instruments as well,” he told Reuters in a phone interview.

The company’s annual results and outlook sent its shares to a record high on Wednesday.

Crypto products are very volatile: bitcoin, the best known cryptocurrency, soared by more than 1,000 percent in 2017 but has already lost about half of its value this year amid mounting calls for a regulatory crackdown on such assets.

Elimelech said that Pluss500 had set limits per customer, per cryptocurrency instrument and per type of category to manage its “risk” against trades in cryptocurrency instruments on its platform.

Plus500’s new customers jumped 136 percent to 246,946 last year, while the number of active customers doubled to 317,175.

Core earnings rose 72 percent to $259.2 million for the year ending Dec. 31, beating analysts’ expectation of $240 million, according to Thomson Reuters I/B/E/S.

Liberum analysts, who have a “buy” rating on the stock, said the outlook for Plus500 was “very positive”.