What Is eToro?
eToro is an international trading platform founded in 2007. It came to the U.S. in 2018 with a cryptocurrency-only offering. The website says it plans to add additional assets in the future. But for now, it offers support for only 15 digital currencies for traders in the U.S.
eToro offers platforms for the web, Android, and Apple iOS devices. Once logged in, you can buy and sell currencies in your own account. Or test and practice strategies in a virtual account where you can trade with no risk. And you can view and copy the trades of other eToro members.
eToro doesn’t charge any commissions. Instead, when you sell, it takes a percentage of your proceeds using a system called “spreads.” Depending on the currency you choose, you pay anywhere from 0.75% to 5% of the value you sell back into dollars. If converting between cryptocurrencies, you pay 0.1% of the transaction total.
The social features, straightforward interface and relatively low fees make eToro best for new crypto traders and traders looking to learn the ropes. On any platform, fees add up quickly for active traders. So keep an eye on costs (and risk) when trading cryptocurrencies.
|Investment Types||Stocks, OTC/Penny Stocks, ETFs, Mutual Funds, Bonds, Options, Forex, Cryptocurrencies, Futures|
|Accounts Types|| |
|Access||Web Based, iPhone App, Apple Watch, Android App, BlackBerry App|
|Broker Assisted Trade||N/A|
|No Fee ETFs||0|
- Buy, sell and hold 15 cryptocurrencies — Turn your USD into BTC, XRP, ETH, LTC, EOS and other popular cryptocurrencies.
- Follow other members — If you have a friend on the platform or a favorite trader, you can see their trades and monitor their portfolio and decide if you want to follow their lead.
- CopyTrader — Turning on CopyTrader allows you to literally copy another eToro member’s trades in real time. Following top traders is an interesting prospect, though the semi-automated trading strategy comes with unique risks.
- Desktop and mobile trading — Manage your cryptos from your favorite easy chair, your desk or the breakroom. Or literally anywhere you have an internet connection. With both web-based and mobile trading, you can keep tabs on your holdings and enter trades 24/7.
- Low fees and no commissions — There are no specific per-trade fees and no recurring fees to keep an account at eToro.
- Spread-based pricing — Pay 0.75% to 5% of the currency’s value when selling. Costs start at 0.75% for Bitcoin and go up to 5% for Tezos.
- Virtual portfolios — When you sign up for a new account, you also get a virtual account with $100,000 paper-money dollars. You can use the virtual account to test a strategy with no risk.
- Advanced charting — Use advanced charting features to put a technical analysis strategy to work without leaving the platform.
eToro doesn’t have quite as robust an offering as some competing brokerages. But the slim and focused product makes it easy for newbies to get their feet wet with cryptocurrency trades.
International Traders Have More Options
In addition to cryptos, international traders can trade stocks, ETFs, commodities and forex assets. It wouldn’t be surprising if the U.S. options expand in the future to include stocks, ETFs and more.
You can take a peek at the web-based platform here to get an idea of what it’s like to use eToro. But you need to create an account and sign in to access all features.
Is eToro a Scam?
eToro is definitely not a scam. eToro comes from a legitimate international company that supports millions of traders around the world. The U.S. arm is registered under the name eToro USA LLC with the main office in Hoboken, New Jersey, just outside of New York City. Internationally, it is registered in Cyprus and Australia.
But because this isn’t a traditional bank or brokerage, funds are not SIPC or FDIC insured. And keep in mind that trading cryptocurrencies are very risky because it is a highly unstable and volatile market.
How Does eToro Work?
eToro users can manage their accounts and investments using an online interface with their computer or smartphone. Here’s a brief look at the eToro trading interface:
What Can You Invest in Using eToro?
Here’s a full list of cryptocurrencies available on the eToro platform:
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Cardano (ADA)
- Dash (DASH)
- Eos (EOS)
- Ethereum (ETHEREUM)
- Ethereum Classic (ETC)
- Iota (MIOTA)
- Litecoin (LTC)
- Neo (NEO)
- Ripple (XRP)
- Stellar (XLM)
- Tezos (XTZ)
- Tron (TRX)
- Zcash (ZEC)
The main cost of using eToro is a fee built into the trading price of cryptocurrencies. eToro uses a pricing model called “spread pricing.” So you pay a percentage fee on the final sale price of your assets.
The math is broken up so you pay a portion of the fee when buying and the remainder when you sell. If your crypto goes way up in value, you’ll pay a higher fee when selling. But if your currency goes way down in value, you could end up getting a refund for a portion of the initial fee.
It all comes down to 0.75% to 5% in fees depending on the currency you trade. Here is a screenshot of the fee list as of October 22, 2020. Spreads can change at any time.
eToro is just one option in a crowded cryptocurrency marketplace. You may also want to consider one of these alternatives:
|Options Trades||$0/trade + $0.65/contract ($0.50/contract for 30+ trades/quarter)||$0.50/contract||$0.65/contract|
eToro Pros & Cons
No commission fees—Trade 15 cryptocurrencies with no per-trade fees or commissions.
Social aspect—Learn from other traders using multiple social features.
Easy to use—Simple and easy-to-use web and mobile platforms.
No stocks, ETFs or other non-cryptocurrency assets—You can only trade in cryptocurrency in the U.S.
Limited offerings—List of 15 currencies may not be sufficient for serious crypto traders.
High sell fee—Fee of up to 5% charged when you sell cryptocurrencies
The Bottom Line on eToro
eToro is a solid choice for new cryptocurrency investors and traders who want to learn how digital currencies work. The platform gives you options to limit your risk and learn from other traders as you develop your own trading strategy. If you’re happy with the platform’s features and trading costs, it could be a great fit for your cryptocurrency trading needs.