Plus500, a trading platform where individuals can bet on movements without owing the underlying asset, has seen far better than expected earnings in 2017 thanks in part due to the increasing popularity of crypto trading.
The contracts-for-difference (CfD) provider in ethereum, bitcoin, bch and other cryptos, said 15% of their trading was on cryptocurrencies.
But despite that relatively small number, Asaf Elimelech, Chief Executive Officer of Plus500, said cryptos had been the entry point for new accounts even if individuals then went on to trade in more traditional markets.
New customers increased by an incredible 136%, the company said, while active accounts increased by 103%.
The higher than expected earnings have led to an increase in dividends for shareholders, who are to receive $1.7 per share. A 91% increase over the $0.9 they received in 2016.
“The interest in cryptocurrencies provided significant momentum to New Customer sign ups and therefore resulted in our marketing spend being much more efficient, especially in the latter part of the year, substantially reducing the average for the year as a whole,” the company said before further adding:
“While cryptocurrency trading represented less than 15% of total Group revenues, the interest in these instruments provided a boost to interest in CFD trading as a whole.
This resulted in a significant increase in New Customers, mostly from well-established Western European and Australian markets.”
That has led to a spike in its stock price, which has been in a bull run for much of 2017 and has increased in value by nearly 4x.
The company has received a new license in South Africa and Singapore, adding to existing licences in UK, Australia, Cyprus, New Zealand and Israel, allowing them to have a global presence.
Something which, Elimelech argues, allows them to weather any stringent regulations in one jurisdictions as they can continue offering their products to their customers in other jurisdictions.
Plus500’s better than expected earnings due to cryptos follows Nvidia’s announcement their profits had exceeded expectations in part due to increasing demand for GPU mining primarily thanks to ethereum.
Which suggests the crypto space is now clearly beginning to affect stock prices of some traditional businesses as well as their earnings outlook.