eToro is a key player in the world of crypto trading being the leading financial technology revolution for over 10 years and has also built on the foundation of being a social trading platform in the world.
eToro began as a traditional CFD platform but has since added cryptocurrency trading as well as other instruments to keep up with current market requirements. They are also the pioneers of copy trading by providing features such as CopyPortfolios and CopyTrading
It is a digital platform for trading cryptocurrencies with over 7 million users worldwide and we would focus on the cryptocurrency angle on this review.
History of eToro
eToro was founded back in 2007 by three entrepreneurs who want to make trading more easily accessible to the general public and potential investors while at the same time reduce dependency on banking institutions as well as other financial institutions.
The company started off by providing investors a user experience with features such as graphs representing financial instruments as well as an intuitive interface for trading.
eToro supported cryptocurrencies
Compared to other cryptocurrency exchanges, eToro offers limited support for the types of cryptocurrencies being supported. This is due to the fact that eToro does not solely focus on cryptocurrency trading but prioritise themself as a general versatile trading site.
They do however still support the more popular cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ripple with all their current prices and movements provided on the eToro website.
Difference between eToro and other crypto trading platforms
The main advantage that you can get from using eToro over any other brokerage is the vast amounts of investment and trading options available if you utilise their service. Due to how versatile eToro is by providing so many ways of investments, you can do both cryptocurrency trading as well as general trading for more traditional assets all on the same platform.
Another unique element to eToro is their social trading and copy trading features. One of their features called CopyPortfolios is a long-term investment option in the form of a managed portfolio by bundling assets and top traders.
Trading tools of eToro
The main goal of eToro’s platform is to provide investors and traders the tools and education for investment.
One great feature is that once customers register for an account on eToro, they will get about $100,000 of virtual money in their accounts so they can try on strategies and skills before they decide to invest any real money.
Another great tool that helps with actual trading is the economic calendar provided. What this tool does is that they would display how future events are likely to impact your assets so that you can decide on a strategy for your trading. All you need to do would be to input the dates and time zone you wish to look at.
This feature additionally provides regular market analysis as well as quick market overviews so you are able to utilise as much or as little information as you want.
The eToro website also lists every asset that is tradable on their platform and you can check out detailed information, news and research.
Copying Traders and CopyPortfolios
Other than deciding on your own on what to invest in, the two features that eToro provides, CopyTrading and CopyPortfolios allow you two copy other traders.
CopyPortfolio is a product of portfolio management. What happens is that you would be investing on a specific index where someone else chooses a combination of assets to invest in for you. Selecting a CopyPortfolio automatically copies trades or multiplier markets based on an investment strategy.
There are two types of CopyPortfolios which are Partner Portfolios which is an investment vehicle created by the eToro partners or Market portfolios which are the top performing assets for any specific market.
eToro creates the CopyPortfolio feature with an aim to assist its investors and customers by diversifying their risk through varied investments. Once investors select to do trading through CopyPortfolio, capital is automatically handled by a professional investment committee and each CopyPortfolio’s performance is given an in-depth analysis in order to maximise potential of gains.
CryptoPortfolio of eToro
Another special product of eToro is a feature called CryptoPortfolio. What it basically does is provide the option of investing in most popular cryptocurrencies such as Bitcoin, Ethereum, Dash,d Litecoin and Ripple to cryptocurrency traders. eToro does set a minimum investment amount for CryptoPortfolio which is at $5,000.
When customers select CryptoPortfolio, they will be exposed to a varied number of cryptocurrencies simultaneously which allows the diversification of risk of losing money when trading, as opposed to investing in only one single cryptocurrency.
There are some restrictions that are placed on CryptoPortfolio though as to the type of cryptocurrency that can be invested in. Firstly, it has to have a minimum market capitalisation amount of $1 Billion and a minimum average monthly trading volume of $20 Million.
Every cryptocurrency will have a weight in the portfolio that is equal to the size of the market capitalisation with minimum 5%. If the said cryptocurrency in question drops below the minimum requirements then it will be removed from the portfolio.
eToro analyses and rebalances the CryptoPortfolio on the first trading day of each month.
eToro does provide an in house cryptocurrency wallet on their site and also as a mobile app for both iOS and android so that investors and customers in the u.s are able to access the mobile app through their phones.
However, it does seem as if the eToro wallet or mobile app is not a true cryptocurrency wallet but more of a cleaner user interface to store cryptocurrencies on their existing platform.
What this means is that eToro does not allow its customers full control funds by giving customers in the u.s a unique phrase or private key that you control. What it does is that once you open the mobile app, it just gives customers the option to trade and send specific currencies.
When customers do not have full control of their funds in the mobile app, there is a high risk of losing money rapidly due to theft or hacks that might occur. Additionally, you also do not have the option to send any funds outside of the wallet to a self hosted wallet. This means if any malicious users were to access eToro, accounts lose money.
Although the eToro crypto wallet would be a decent choice for beginner customers in the u.s, it is not a good way to store large amounts of funds if you do not want to lose money when trading, and also if you are serious about cryptocurrency as there is a high risk of losing your funds.
Launched in APril 26 2019, eToroX is a fully regulated cryptocurrency exchange which provides its customers actual access to crypto assets which allow you to withdraw them from the exchange to reduce the risk of lose money when trading of cryptocurrency traders.
Cryptocurrencies and payment methods
Investments of cryptocurrencies through eToro are done in the form of CFD. CFDs are complex instruments so you should do some research on CFDs as there is a high risk of losing money due to not understanding what you are trading. Due to volatility of the market, there is always a possibility for investor accounts lose money to happen.
A great upside to eToro is that they provide a lot of options when depositing funds into their platform for customers to deposit money when trading CFDs such as credit/debit card, wire transfer, PayPal, Skrill, Neteller, Webmoney, Giropay, China Union Pay, Yandex and Local Online banking.
eToro does charge a minimum first time fee of $200 and most of their transaction fees are denominated in USD, so customers from outside the u.s will have any currencies deposited be automatically converted into USD.
As eToro contains a variety of trading options when involving money when trading CFDs, the fee structure would vary depending on the type of asset. As an advertiser disclosure, customers looking at the fee would be quite a fee as eToro fees are slightly above average for investors.
Any Bitcoin transactions cost a 0.75% fee for exit positions which customers will find are higher than most exchanges. Other types of coins would trade at a 2-4% fee which is also higher than average.
eToro also charges a withdrawal fee when customers device to cash out. You are not allowed to withdraw any cryptos from eToro and only fiat currencies are withdrawable and each transaction will be charged $25.
An additional fee is placed on inactive customers who have not logged in for 12 months so this is also unfortunate.
If you decide to hold long term, your account balance will be debited $10 per month once it is considered inactive. As such customers who are either trading in large volumes or are inactive long term holders would find that they will be losing money rapidly due to eToro’s fee structure.
Countries that eToro Support
eToro is widely available worldwide and supports the following countries:
Argentina, Australia, Austria, Bahrain, Belgium, Brunei, Bulgaria, Canada, Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, India, Ireland, Italy, Jordan, Kuwait, Latvia, Liechenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, New Zealand, Nigeria, Norway, Oman, Paraguay, Peru, Poland, Portugal, Qatar, Romania, Russia, Saudi, Arabia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, The Netherlands, Ukraine, United Arab Emirates, Uruguay, UK and Venezuela
The U,S was not included in this list because it was until recently, closed in the u.S but is now available in the u.s except for the states of Delaware, Hawaii, Illinois, Minnesota, Nebraska, Nevada, New Hampshire, New York and Tennessee.
Review from Customers
Although most of our readers and myself personally have not encountered any personal issues with eToro there is a large amount of negative reviews that are found online on a number of sites.
However, such negative reviews are common on most cryptocurrency exchanges so you can take them into account and then invest a small amount at the start to determine your own decision about eToro.
There is also one thing to keep in mind that usually, happy users will most of the time not leave any reviews on sites while unhappy users are usually more motivated to share their experiences.
Etoro provides customer support in 9 different available languages and also accessible via an online help desk. However, eToro does not provide a live chat option or phone support.
There are a number of ways that users are able to invest their eToro funds which also depends on a customer’s country which consist of China Union Pay, credit and debit cards, Giropay, Neteller, PayPal, SKrill Limited UK, Wire Transfer, WebMoney, Yandex, Wire and ACH.
eToro vs Coinbase
For most American and Europeans, Coinbase is mostly seen as one of the easiest and quickest ways to get into Crypto due to their low fees and platform providing a very easy way to buy and own cryptos through deposit options such as wire transfer or a debit card.
Coinbase however, does not support any trading options to go leverage short and long. This is because Coinbase’s primary function is the purchase and sale crypto, and not trading. Although Coinbase does not have their own proprietary exchange which is called Coinbase Pro, it has only a limited number of assets.
eToro vs Robinhood
Since Robinhood was founded back in 2013, it has raised about $176 million in funding. eToro however, is an Israeli company and headquartered in Palo Alto, California. Although eToro began as a web platform, and later further expanded its operations to include mobile trading.
Robinhood is mainly known for its mobile app functions and only in 2018 was it first offered a web-based trading experience.
Another main difference between Robinhood vs eToro is that eToro primarily focuses on European customers while Robinhood caters to American market. While Robinhood is considering an overseas expansion, Robinhood has not yet made the move to European markets.
One more difference is that eToro allows their customers the option to invest in commodities while Robinhood does not provide this option. However, Robinhood does allow users to invest in Bitcoin and Ethereum.
eToro vs Binance
While Binance is a crypto trading that does not offer copy trading as one of their features in the u.s unlike eToro since CFDs are complex instruments, they are taking steps towards offering a full range of cryptocurrency products which includes the ability to leverage long or short options.
Binance is also one of the most popular cryptocurrency exchanges out there with a large number of coins that are available for trade. Binance is so large that any coins that are listed on the Binance platform shows a measurable increase in price and this phenomenon is most often known as a Binance effect.
One advantage of eToro vs Binance is that Binance users are able to withdraw all cryptocurrencies from the Binance platform into any wallet. Binance is not as strict in terms of law and regulations.
Binance has also traditionally been able to create an account for users with limited KYC requirements and a short verification process. Binance is also a purely trade platform for cryptocurrencies and there are no options to use the platform to invest in either stocks or commodities.
eToro vs Plus 500
Similarly to eToro, Plus 500 is founded in Israel. Both platforms also allow for leveraged trading as well as an easy to use an intuitive layout. Fees on each transaction are different for both platforms, but they even out if comparing the fees on average so users that make different types of asset trading can expect to pay about the same fees for both platforms.
The differences however, between eToro and Plus 500 platforms is that Plus 500 only charges an inactive fee for $10 after three months time. Plus 500 also does not charge any withdrawal fees while on the other hand eToro charges a $25 fee/
Another difference between eToro and Plus 500 is that Plus 500 provides customer support by way of email while eToro does not. As such, eToro should be better for traders who would like to do copy trading while Plus 500 is more suitable for the trader who wants to access to more cryptocurrency markets.
eToro offers multiple assets for the common trader to access as users have the option to perform both stock trading and copy trading on cryptocurrencies as well as CFDs.
CFDs however as mentioned are complex instruments and come with a risk. Most retail investor accounts lose money when being involved in CFD’s so you should understand how CFDs work at first before initiating any copy trading.
Frequently Asked Questions
Is eToro regulated?
Yes eToro is regulated!
Can you withdraw money from eToro?
Yes you are able to withdraw fiat currencies from eToro which includes USD and EUR.
Can eToro Be Trusted?
With over 10 years of experience working as a financial analyst, Eric is highly aware of the potential of cryptocurrency, particularly Bitcoin, and the impact it will bring towards the global economy. He is committed to share everything he knows about crypto here at Crypto Digest News.