eToro is one of the most widely used crypto brokers with more than 30Million users, and the user base is growing than ever, thanks to all crypto influencers. Youtube and blogs are full of positive reviews about eToro, but is this platform really recommended for trading? Let’s find that out in this comprehensive personal review of eToro platform.
One of the reasons why eToro is recommended as a top-notch brokerage platform by the influencers is because it lets you trade various asset classes like stocks, ETFs, including cryptocurrencies and NFTs at one place.
While it makes it easier for individuals to trade and invest multiple asset class at one place, it also comes with an added cost – higher fees. If you keep adding the fee you pay everytime on eToro for trading crypto, the amount may be life changing considering the volatility of cryptocurrency industry.
Despite this drawback, let’s explore the platform’s offerings and features to determine if they are compelling enough to outweigh the higher fees.
What is eToro?
Back in 2007, eToro made its debut in Israel, thanks to the vision of three ambitious entrepreneurs. Initially, the platform centred around forex trading, but it didn’t take long for eToro to gain momentum and evolve into a global service with a broader product lineup. If you’re a newbie in the world of cryptocurrencies and prefer a hands-on learning experience, eToro might just be your ideal destination.
eToro is a social investment and multi-asset brokerage company with a global presence. It provides a platform for trading various assets such as stocks, ETFs, CFDs, and cryptocurrencies. With a user base of over 30 million people, eToro offers a range of tradeable assets and is accessible through desktop and mobile applications, making it suitable for those seeking a communal trading experience.
In short, it is a trading platform, that lets you invest in multiple asset class from one app/website. This is one of the best part about eToro.
eToro: About the Platform
- Type: Investing platform – Broker
- Trade: Stocks, ETFs, CFDs, Crypto, NFTs
- Number of users: 30Million+
- Tradeable assets: 3000+
- Available: Desktop, Android and iOS app
eToro for Crypto
Since we are discussing eToro from a crypto investing point of view, let us examine the platform through the lens of crypto investors.
I have been investing in crypto since 2017, and based on my experience in this industry, I can say that eToro is not a recommended platform for crypto investors when considering the fees charged by the platform.
However, for anyone who wants to get started with crypto investing and is a newbie, eToro could be an excellent choice due to its ease of use. With eToro, you can buy cryptocurrencies in just a few clicks. Additionally, eToro offers a selection of around 30 cryptocurrencies to choose from. While there are more than 20,000 cryptocurrencies available, deciding where to invest requires thorough research.
eToro has already refined its list of cryptocurrencies and narrowed it down to 30 options from the overwhelming pool of 20,000. For beginners just getting started, these 30 cryptocurrencies provide ample choices to invest their initial funds. Having fewer options reduces the risk of losing money for new crypto investors. Therefore, I highly recommend eToro to anyone seeking a user-friendly and straightforward crypto platform.
However, for advanced crypto traders and investors, eToro is not recommended. The platform’s high fees can result in substantial financial losses during the trading and investing process. Furthermore, advanced traders often desire to invest in new cryptocurrencies listed on decentralized exchanges like Uniswap, which eToro does not support.
eToro Social Platform: Is it Good or Bad for Crypto Investors?
eToro comes with a social platform where traders can discuss everything related to cryptocurrencies, current happenings, news and opinions. And this platform is quite active.
One of the standout aspects of eToro comes from its social platform which hosts an active and engaging environment for crypto traders. Plus, the platform offers social features like news feeds specifically tailored to the coins available for trading.
While these features may be a good option for those who wants to keep themselves updated with crypto happenings on a regular basis, this could also lead you to invest in coins during their ATH. Seeing posts by popular traders, or influencers, about trending cryptocurrencies, you may end up investing in these coins and become a bag holder.
Copytrading using eToro: Good or Bad?
eToro stands out as a crypto trading platform by offering a unique social trading feature known as CopyTrader. This feature allows users to easily check and automatically replicate the trades of other successful traders.
Here’s the deal: Imagine the convenience of being able to copy the trades of your favorite high-performing traders with just one click. Well, that’s precisely what the CopyTrader feature offers. All you need to do is specify the amount of money you want to allocate, and eToro takes care of the rest.
It automatically mirrors the positions of your chosen eToro trader, ensuring that your funds are proportionally allocated accordingly. And the best part? With a minimum investment of $200, you can simultaneously copy up to 100 different investors.
Now let’s evaluate whether eToro’s CopyTrader is a suitable option for you.
In my opinion, copytrading can be a double-edged sword. With numerous investors and traders whose trades you can replicate with a click, it can be challenging to determine which ones to follow.
If you end up copying trades from an unsuitable investor, your investment can quickly dwindle to zero. The risk is entirely in the hands of the trader you trusted with your money. While it is true that the investor would also incur losses, if the trades go sour, you would suffer the consequences as well. In a bullish market, many investors may appear profitable, but their results can drastically change in a prolonged bear market. Therefore, it is crucial for eToro users to conduct thorough research to choose the most suitable investor to copy trades from.
Failure to do so can result in the loss of your entire investment.
In addition to its trading services, eToro also provides additional features to its U.S. users, such as the cash management service called eToro Money and the automated portfolio management service known as Smart Portfolios. These services offer added convenience and flexibility to the eToro platform.
eToro: Available Countries
With a whopping selection of over 3,000 tradeable symbols, eToro provides a comprehensive trading experience.
Good part is eToro is available in most of the countries, whether you live in the US, the UK, Australia, India and more. However, there are some countries like Afghanistan, Bhutan, India etc where eToro is blocked and you can’t signup if you are from the restricted country. You should check if your country is in the restricted list, before signing up.
eToro is highly regulated platform in the US and is also FCA regulated in the UK.
Just like numerous crypto exchanges, eToro welcomes U.S. residents to sign up for an account. However, it’s important to note that not all features of the platform are available in every state. For example, crypto trading, which is a popular aspect of eToro, is not accessible in New York, Nevada, Hawaii, and Minnesota due to regulatory restrictions. While certain limitations exist based on state regulations, eToro continues to evolve and expand its services to cater to the needs of its U.S. user base.
Adding to its growing list of offerings, eToro made a significant move by launching options trading in November 2022. This expansion means that users in the United States can now access options trading along with the existing assets and crypto offerings, all while enjoying the social trading experience that eToro provides.
eToro for Crypto – Pricing and Fees: How much does it cost?
When it comes to fees, eToro operates under a fee structure that includes a 1% fee on all crypto transactions (buy and sell), in addition to a spread.
While this fee is lower than what some competitors charge, it may not be the most competitive fee in the market. The platform charges relatively higher fees than other crypto trading platforms and is not recommended for advanced traders who engage in heavy trading.
It’s important to keep this in mind when considering eToro as your preferred platform. There is also an additional $5 withdrawal fee that is charged every time you withdraw from the platform.
For long-term investors who aim to buy and hold crypto for an extended period, there is an important aspect to be aware of: eToro imposes an inactivity fee on accounts that remain inactive for a year. The inactivity fee amounts to $10 per month.
On the eToro website, you can only withdraw and deposit fiat currency. However, if you wish to withdraw crypto (deposits are not allowed), you can do so exclusively through the mobile app known as eToro Money, available for both Android and iOS. This app is distinct from the original eToro app.
Furthermore, eToro provides a crypto-only exchange that allows you to buy, sell, deposit, and withdraw crypto directly. To access this service, you need to sign up on the eToroX platform. It is important to note that apart from the blockchain fee charged by all crypto exchanges, there are no additional withdrawal fees. However, for crypto-to-crypto transactions, a 1% fee is applied for both buying and selling.
eToro Fee for Crypto Traders: Good or Bad?
Charging high fees is always a disadvantage for any crypto trader. However, the positive aspect is that there are no hidden charges, as all fees are clearly stated beforehand.
When it comes to displaying fees transparently on a crypto exchange’s website or app, it is widely known that it can sometimes be unclear, particularly on platforms designed for beginners like Coinbase and Gemini.
What sets eToro apart is its commitment to transparency in presenting the fees associated with crypto trading. They provide clear information about the fees users can expect when participating in crypto trades. This level of transparency is truly refreshing and enables users to make well-informed decisions.
Moreover, eToro takes a different approach to ETFs and stocks. Unlike crypto trades, there are no fees or commissions imposed for trading ETFs and stocks on the platform. However, it is important to note that certain ETFs may have their own internal costs, which users should be aware of.
Research resources for Traders on eToro
eToro provides a range of valuable resources and features to assist traders in their decision-making process. One such feature is the inclusion of an economic calendar, which allows users to stay informed about important economic events and announcements that may impact the markets.
Additionally, eToro offers an earnings reports calendar, which provides insights into the upcoming earnings releases of various companies. To further enhance users’ understanding of the market, eToro delivers news headlines, daily market analysis series, and engaging podcasts. These resources help traders stay updated on the latest market trends, news, and expert opinions.
eToro’s research options are decent and have been getting better over time, but they haven’t quite reached award-winning status yet. For instance, they don’t provide daily videos discussing market analysis, and some features are only accessible once you reach certain account levels. eToro falls short in terms of offering the tools, calculators, and advanced trading capabilities that experienced investors usually rely on. Additionally, their planning and screening tools are pretty much nonexistent. So, while they have made progress, there’s still room for improvement to meet the needs of sophisticated traders.
Is eToro a Safe Crypto trading platform?
eToro goes the extra mile to ensure the security of your account with two-factor authentication (2FA) and biometric fingerprint entry.
When it comes to your equity assets like stocks and ETFs, they’ve got you covered with the Securities Investor Protection Corporation (SIPC) insurance.
This protection safeguards securities customers, offering coverage of up to $500,000. But that’s not all!
eToro’s clearing partner, Apex, takes it a step further by adding supplemental insurance. This additional coverage provides eToro customers with up to $37.5 million in securities protection and $900,000 in cash per individual.
And when it comes to your cash assets, you can rest easy knowing they’re held in Federal Deposit Insurance Corp. (FDIC)-insured bank accounts, offering coverage for funds up to $250,000.
Pros and Cons of eToro Trading Platfrom
- eToro has a strong presence worldwide.
- You can have a great time engaging with others on this platform.
- It’s super easy to use, with a website and mobile app that are really user-friendly.
- You can make free deposits using your debit card.
- It allows you to invest in fractional shares.
- You’ll find a wealth of educational resources to help you learn more.
- You can try out a demo account to get a feel for how everything works.
- They even offer a cash management service called eToro Money.
- It’s currently only available in 46 out of the 50 U.S. states. It is already restricted in countries like India, China,
- Crypto trading fee is on the higher side
- Customer service options are limited.
- The platform does not support automated trading strategies based on algorithms.
- There are limitations when it comes to different types of accounts that you can have.
Final thoughts: Should You use eToro?
eToro’s user-friendly interface can be particularly beneficial for less experienced traders who appreciate some guidance. However, I wouldn’t recommend eToro for active or high-volume traders, as they may find the higher spreads and small maximum trade sizes to be limiting.
While eToro has made some additions to its product offerings, it still lacks more advanced platform features and trade functionality. As a result, the overall experience is more suitable for individuals who prioritize the social investing aspect as their primary trading interest.
eToro is an excellent choice for retail traders looking to harness the power of copy trading and crowdsource investment ideas.
Moreover, eToro caters to highly-experienced active traders as well and you can make money by becoming an investor from whom other eToro traders can copytrade. It offers a rewarding opportunity for experienced traders to share their investment strategies and ideas with the eToro community. Overall, eToro provides a dynamic environment that fosters collaboration and knowledge-sharing among traders of all levels.
While I did not think of making any money as an eToro affiliate, I tried to present the true and honest opinion of eToro platform because I think at the end of the end, more than the affiliate commission, you should know and learn about the platform and decide for yourself, if you would like to sign up with eToro or choose an alternative crypto exchange. If you like the content, kindly share this with a friend or two who might find it useful. Also do not forget to join our crypto community @Cryptobullsclub on telegram and start a discussion.