Bitcoin, the world’s most popular cryptocurrency, experienced a fork on 24th October 2017 and is heading for another in mid-November.
At eToro, we only support a fork if we feel it has a clear direction and purpose. The safety of our customers’ funds is paramount, and we have maintained this position whenever we have added new instruments to our platform. Based on our assessment of the upcoming forks, and their potential impact on our business and customers, we are releasing the following statement:
What is a hard fork?
A hard fork occurs when a software update is introduced to the existing blockchain, which isn’t compatible with the existing blockchain software. This forces the blockchain to split in two. One blockchain will follow the new set of rules, while the other continues to follow the original set.
Forks are commonplace within the industry and they act to update the relevant blockchain. If there is consensus within the community one chain will survive. If no consensus is reached, then both chains remain and a new crypto coin (asset) is created as was the case with Ethereum and Ethereum Classic and Bitcoin and Bitcoin Cash.
The Bitcoin 2X (B2X) fork – also known as SegWit2X
At eToro, our first priority is to our customers and the security and stability of our platform. During hard forks, there may be periods when the Bitcoin network is unstable. For example, in the case of the upcoming Bitcoin2X fork, there is no Replay Protection, which may lead to transaction errors and double spending.
With this in mind and taking into account available information, eToro will halt trading prior to the fork – further details will be provided via email, closer to the date. Furthermore, all short positions (manual and copied) will also be closed automatically, prior to the fork.
Subject to the fork occurring as planned and the new B2X coins being issued to all BTC holders, eToro among them, eToro customers holding a non-leveraged long position will be credited on a 1:1 basis with B2X. This will be in accordance with their open BTC positions at the time of the Bitcoin fork and until the credit date. Please note that it might take some time before the B2X coins are credited to your account and is highly dependent upon several external factors, such as the stability of the network.
eToro will refer to the Bitcoin Core coin as BTC and the newly created coin as Bitcoin 2X (B2X). Additional information including how to redeem your coins will be provided nearer to the date.
Bitcoin Gold Fork
eToro will not be supporting the Bitcoin Gold fork. There is little clarity on this fork from the development community, and there are currently no major exchanges nor wallets or mining pools supporting this fork. If this changes significantly in the future, eToro may review its decision.
If you have any further questions, please contact your account manager, or come chat to us via our platform. All trading involves risk. Only risk capital you’re prepared to lose. The information above is not investment advice.