eToro was founded in 2007 and quickly moved to the cutting edge of the financial sector by pioneering the art of social trading–or copy trading. Not only can members of eToro open and close their own positions for assets such as currencies, stocks, cryptocurrencies, and ETFs, they can also mirror other members by automatically copying trades. Much of the platform’s value proposition is the ability to socialize with other traders, delve into their profiles and strategies, discuss the markets, and replicate their tactics.
innovative platform: eToro made its name through its social investing platform, an innovative tool that allows users to copy the trades of other investors.
eToro has more than 20 million users in 140 countries worldwide — and the U.S. is now on that list. However, while eToro runs multi-asset brokerages (offering stocks, commodities and forex trading) in other countries, so far U.S. customers can trade only cryptocurrencies on the platform. The company plans to expand its U.S. offerings in the future.
Where eToro falls short
Limited service: eToro currently only offers its crypto service in 44 U.S. states and Washington, D.C. While all U.S. residents can sign up for a free eToro account for virtual trading, eToro is currently unavailable for actual cryptocurrency trading for residents in these states: Delaware, Hawaii, Minnesota, Nevada, New York and Tennessee.
eToro is best for:
- Cryptocurrency traders.
- Social or copy trading.
eToro Pros & Cons
Traders may also find the recently introduced eToro Club benefits useful. You’ll receive special perks such as a dedicated account manager, a quarterly analyst newsletter, streaming webinars, a portfolio tracking app, priority customer service and more to come.
The level of benefit depends on what eToro calls your “realized equity,” which is basically the amount of money you’ve deposited or traded into a realized profit. The more you hold with eToro, the higher your level in the program, ranging across five levels from silver to diamond.
eToro is licensed to operate in the EU by CySEC, the Cyprus Securities and Exchange Commission, in the UK by the Financial Conduct Authority, and in Australia by the Australian Securities and Investments Commission. UK investors are also covered by the FCA’s Financial Services Compensation Scheme (FSCS) which covers each trader to a maximum of £50,000 if eToro becomes insolvent. To keep customers safe, eToro carefully abides by the rules set by these oversight authorities. Traders are warned several times about the risks of trading and are asked for a very thorough amount of personal information before getting started
Opening an eToro Account
Opening an account on eToro only takes a few minutes. First, you’ll need to provide a username, password, and email address. Once you’ve verified your email address, eToro will require that you answer several questions to determine your risk tolerance and trading experience.
eToro users are also required to verify their accounts. As part of this process, you’ll also have to provide personal information, proof of address, and share a valid, government-issued ID. Identity verification can take a few days, and eToro notifies new users once verification is complete.
Once you’ve created an account on eToro.com, registering for eToro is only a matter of one click, as your eToro account allows you to access both trading platforms.
eToro Trading Platform
One of eToro’s most unique features is the option to make copy trades. The platform curates a number of “Popular Investors” whose portfolios other users can follow. These users receive varying levels of pay from eToro depending on their status in the program (based on their own investment, time on the platform, and number of copiers). To mitigate risk, popular investors are given a risk score visible to all users — if their score exceeds a certain point, they can no longer be copied by other users. If you want to use the copy trading feature, you’ll need to invest at least $200 with eToro.
While it’s an interesting option, investing this way can make an already-speculative investment in crypto even more of a gamble. Because these users are generally taking part in active trading activity, it can be more risky than simply buying and holding a crypto long-term. Most copy traders also include different altcoins among their portfolios (rather than sticking to Bitcoin and Ethereum, as the experts we’ve spoken with recommend for most long-term investors), so make sure you’re prepared to take on the extra risk before considering copy trading. Even after opting in, you can stop copying another trader at any time.
Social Trading Community
Social-media-like feeds of user thoughts and comments are present throughout the eToro platform. You see a general feed immediately when you log in that covers user thoughts on crypto, markets and investing broadly.
When you navigate to each coin or managed portfolio, though, you gain access to a unique feed that presents user posts related only to that specific offering. These comments may be helpful in sparking trading ideas for those new to the crypto world, but keep in mind that their quality is not assured.
eToro Account Types
Users can contact eToro customer service via email or online chat. The listed phone number is just a recording that directs users to chat. But here’s the thing about chat: It’s only available for eToro Club members. In effect, this means most users will only have email customer service options. You can also visit the Help Center to sort through categorized lists of FAQs.
In terms of security, cash assets are held in Federal Deposit Insurance Corp. (FDIC)-insured bank accounts. Security protocols for crypto include offline and online storage of coins, two-factor authentication and state-of-the-art monitoring tools. In addition, no member of the eToro staff can transfer users’ crypto out of cold storage.
we found just two account types – a retail account and a professional account. There of course is a demo account available as well. Both accounts allow investors to trade in the full range of more than 2,000 instruments and many fees remain the same – chiefly deposit and withdrawal fees.
Leverage is restricted to 30:1 for major currency pairs, 10:1 for most commodities, 5:1 for CFD stocks, and 2:1 on crypto CFDs. The minimum deposit on the retail account varies depending on the country. UK residents only require an initial deposit of $10 – raising to $50 for regular deposits.
Finally, our review of eToro also confirmed the existence of an Islamic Swap-Free account that ensures Islamic traders do not accrue interest on deposited funds or swap points for overnight trades.
eToro Commission and fee
eToro’s fees are based entirely on spread — or the difference between what the crypto is selling for and what you pay for it. This spread differs depending on the coin, and eToro says it may fluctuate based on market conditions. Instead of paying this spread both when you buy and sell, eToro says you’ll only be charged once for each of your assets, when you buy.
Here are the current spread fees for some common cryptocurrencies available on eToro:
- Bitcoin (BTC): 0.75%
- Ethereum (ETH): 1.90%
- Bitcoin Cash (BCH): 1.90%
- Litecoin (LTC): 1.90%
- Dash (DASH): 2.90%
- For example, if you want to buy $100 worth of Bitcoin, the actual price you’ll pay on eToro will be more like $100.75.
There aren’t any deposit fees for U.S. users to deposit U.S. dollars into an eToro account. Currently, the platform offers three deposit options, with different minimum and maximum deposit amounts:
This broker is currently regulated by top-tier financial authorities. These cover several jurisdictions including Australia, Europe, and the United Kingdom. The following authorities regulated eToro:
- Financial Conduct Authority UK (FCA)
- Cyprus Securities & Exchange Commission (CySEC)
- Australian Securities and Investments Commission (ASIC)
- Financial Industry Regulatory Authority (United States)
If you prefer, you can keep your crypto held within your account on the eToro trading platform, like many other exchanges. But you can also withdraw your crypto and store it using eToro’s wallet or your own crypto wallet. For U.S. eToro users, there’s no fee to withdraw money from your account on the eToro trading platform, though there is a $30 minimum.
If you use the eToro Wallet, there are some fees to keep in mind. Each time you send money from your eToro account to your eToro wallet, there’s a 0.5% fee ($1 minimum and $50 maximum).
What is the benefit of social trading through eToro?
eToro’s CopyTrader lets you see what real people trade in real time. You can find and follow the traders you like and copy their trading activity — it only takes a few clicks to build a real people-based portfolio!
What is the eToro Wallet?
The eToro Wallet is a way to securely store crypto. With the eToro Wallet, you can transfer crypto from the eToro trading platform, send and receive crypto to and from other wallets and convert one crypto to another crypto. The eToro Wallet is currently being rolled out on a state-by-state basis and is available via the Play Store on Android and the App Store on iOS.
Is my personal information safe with eToro?
eToro uses SSL encryption through top-level banks to protect your personal information.
How long does it take to receive my funds?
Any funds deposited initially using online banks are subject to a 7-day holding period. After this, you can have them sent to you within 2 business days.
Can you make money with eToro?
While traders can make money on eToro, 68% of traders lose money. Despite the high percentage, it ranks among the best industry wide.
Is eToro safe?
Yes. Using firewalls and data encryption, eToro works tirelessly to ensure the trading community is safe. Plus, the company shares tips on its website that will help you make your account more secure.
This cryptocurrency exchange is a good fit for Serious cryptocurrency investors and traders looking for a full-featured platform and a straightforward pricing structure.
The versatile trading platform is a standout, as is the CopyTrader feature that allows you to copy your favorite investors. To top it off, the transparent fee structure is both competitive with the industry and easier to understand.
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