A message to our valued clients by our President and CEO
Dear NDAX clients,
Let me start by thanking you for your continued support and by expressing our best wishes that you, your family, and community are safe and healthy during this global pandemic. March 2020 will be a month that our generation will never forget, and future generations will learn from for many years to come. During this month, we witnessed major events, that I’d like to briefly provide insight on.
The global pandemic “COVID-19” is devastating, it’s not like any other virus due to its lethal properties. At NDAX, the safety of our employees and customers is of the utmost importance and for that, we activated our Business Continuity Plan during the week of March 7th, which enabled our team to seamlessly transition to work remotely without affecting the operations of NDAX. This allowed us to continue to offer the tightest spreads and top of the line customer service during the most volatile times.
I’d love to share some of the precautions our team is taking to stay safe in hopes that it will help you and your loved ones.
• Self-isolate and avoid leaving your home except for necessities like groceries and going out for medical reasons.
• When going shopping get enough supplies to last you for 2 to 3 weeks at a time Wash your hands often and do not touch your face.
• Disinfect your shopping bags and groceries before entering your home.
• Sleep well
• Wash your hands
• Do light workouts at home
• Listen to your Provincial medical updates
• Don’t read and watch videos about Coronavirus, there are a lot of myths and misinformation. These types of videos create anxiety which is proven to be detrimental during these unprecedented times.
The Financial Markets have been deeply affected by COVID-19. March 2020 has been the worst month for the S&P 500 since the financial crisis in October 2008. This drop did not exclude cryptocurrencies. Bitcoin, which is the largest and most popular cryptocurrency dropped slightly below USD $3,900 (CAD $5,600), levels we have not seen since April 2019.
I want to highlight a couple of points and provide an explanation of what I think happened:
• On March 12th, we saw massive drops in the stock market causing multiple halts. This process of pausing the market is called a circuit breaker which was introduced after the Black Monday crash of 1987. This process has 3 levels, the first 2 levels halt trading for 15 minutes after a 7% and a 13% drop, respectively. The 3rd level occurs after a 20% drop and suspends the market for the rest of the day.
• Unfortunately, Bitcoin markets are still very young and lack these regulatory protective measures. While we think a similar approach would have prevented the 50% drop in price, we understand the difficulty to come to a consensus for all exchanges to agree and enforce such rules. The cryptocurrency market differentiates itself in many ways compared to traditional financial markets including the ability to trade 24/7. Thus, it would be interesting if cryptocurrency clients would even want to see circuit breakers on exchanges. Regardless, these possible regulatory implementations do not change the fundamentals of Bitcoin.
• On March 12th, the market cap for Gold dropped by more than 4x the amount of the Bitcoin market cap, which further demonstrates the panic selling that occurred as traders were seeking an exit to fiat currency (USD).
• This latest drop showed us a lack of liquidity on major cryptocurrency exchanges. When major volatility occurs, it is easier to identify that some exchanges are still deceiving their customers with wash trading and fake volumes.
• Leverage and futures trading for anything over 3x in a young market like Bitcoin is a double-edged sword. It can drive the market up like in 2017, or drop it by more than 50% in a day like on March 12th, 2020.
This March, NDAX had a record number of new client signups and trading volume. The vast majority of trades were buy orders as NDAX investors looked to purchase cryptocurrencies at levels not seen since April 2019. Even with the enormous volatility, our trading platform and spread worked seamlessly with no downtime, ensuring tight spreads compared to other exchanges and services that had more than $500 spreads at times.
We are very proud of how the NDAX trading platform performed during that time. Clients were able to deposit funds, buy cryptocurrency and withdraw assets within minutes, allowing them to take full advantage of the drop in prices on their favorite cryptocurrencies. NDAX continues to be committed to providing our clients with the best possible customer service and adhering to the highest ethical standards in the industry.
Unfortunately, scammers are taking advantage of these tough times to target Canadians in a variety of potential scams. We ask our NDAX customers to be cautious of anyone trying to offer you services in exchange for Bitcoin. Some scammers will take advantage of the layoffs in the market to offer you a job that allows you to work from home, but before you can start, they require you to send them Bitcoin as a proof of deposit address for future payments. Others will promise you a very lucrative return on investment if you invest in their trading programs which may be a Ponzi scheme. Remember, if it sounds to be too good to be true, it probably is a scam. If you feel that you have potentially been a victim of a fraud, please contact your local law enforcement and report the scam to the Canadian Anti-Fraud Center.
NDAX promises to be here for you during these uncertain times and we appreciate your continued support and business. If you ever have any questions or require any assistance, please reach out to our customer support team and they will be happy to answer any questions that you may have.
My best wishes to you and your loved ones,
Bilal Hammoud - President and CEO