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Best of Etoro

• Enables investment in stocks, ETFs, and crypto
• User-friendly application
• No charge for debit card deposits
• Offers a demo account

Diego G. Crypto Enthusiast

Updated: July 5, 2024

eToro Review 2023: A Social Trading Platform Laden with Unique Features eToro provides a broad spectrum of cryptocurrencies, along with other investment options like stocks and ETFs. It introduces a unique social trading feature that enables you to replicate the trades of other investors.   Complete review of the eToro Review Ideal for: Cryptocurrency investors […]

eToro Review 2023: A Social Trading Platform Laden with Unique Features

eToro provides a broad spectrum of cryptocurrencies, along with other investment options like stocks and ETFs. It introduces a unique social trading feature that enables you to replicate the trades of other investors.

Complete review of the eToro Review

Ideal for: Cryptocurrency investors and traders seeking a comprehensive platform with a variety of investment products

Pros:

Cons:

Key benefits

CopyTrader

One of eToro’s standout features is the CopyTrader function. This feature lets eToro users replicate the trades of their preferred high-performing traders with a single click. Simply set the amount you wish to invest. eToro then automatically distributes those funds to mirror the positions of your chosen eToro trader. This social trading platform does not charge any management or other fees for this service. Users can opt to copy a single successful trader or up to 100 simultaneously.

Invest in stocks, ETFs, and crypto

eToro stands out as one of the few platforms where you can trade both cryptocurrencies and stocks. Unlike other platforms with limited crypto options, eToro boasts a vast array of digital assets. Additionally, you can engage in zero-commission stock trading and even purchase fractional shares within the same account. For those new to investing or wanting to test the platform, eToro provides a virtual brokerage account for risk-free exploration.

Free debit card deposits

While many crypto platforms charge for debit card deposits, eToro offers this service for free. Investors can make fee-free deposits of fiat money (traditional currencies like U.S. dollars) via bank transfer or debit card. Non-U.S. dollar transactions incur a conversion fee.

Areas for improvement

Restricted Range of Cryptocurrencies

When compared to leading cryptocurrency exchanges, eToro’s offering is somewhat limited. U.S. investors have access to approximately 25 different cryptocurrencies, while non-U.S. investors can access around 75. In contrast, other major U.S.-based exchanges provide hundreds of cryptocurrencies. Nonetheless, if your goal is to invest in leading cryptocurrencies along with equities and manage all your assets in a single location, eToro might be a suitable choice.

Fees could be lower

eToro imposes a 1% fee on crypto transactions plus a spread. This is lower than some competitors, but not the most competitive fee in the market. Some crypto platforms offer trading fees of 0.1% or less. If you’re planning to buy a significant amount of digital currencies, paying more than 1% in fees every time you buy or sell can reduce your profits. If you’re an investor who plans to purchase crypto and hold onto it for an extended period, it’s important to note that eToro imposes an inactivity fee on accounts that have remained dormant for a year.

Limited Availability in U.S. States

While all U.S. residents are eligible to register for a virtual trading account, those residing in Hawaii, Minnesota, Nevada, and New York are currently unable to buy and sell crypto on eToro’s platform. The company’s goal is to eventually extend its services to all 50 states. Until that goal is achieved, some traders may need to seek alternatives.

Alternative Options to Consider:

• Robinhood: If you’re interested in trading both stocks and cryptocurrencies on the same platform, Robinhood is a viable option. It allows trading in stocks and options, including fractional shares. Additionally, it provides access to more than 10 different cryptocurrencies and does not charge transaction fees.
• Coinbase: If you’re looking for a larger selection of cryptocurrencies, Coinbase may not offer stocks or other investments, but it’s still a leading exchange worth considering. It offers hundreds of different cryptocurrencies and has an excellent platform for advanced investors. Coinbase has a complex (and often expensive) fee structure, but there’s still a lot to like about this platform.

Understanding eToro

eToro operates as a crypto broker, providing a range of investment products in addition to cryptocurrencies. Investors have access to over 2,500 stocks, including international equities, as well as ETFs. The platform also enables users to purchase fractional shares, allowing you to invest, for instance, $100 in a specific stock instead of buying an entire share. Advanced trading features such as margin and leverage, as well as commodities like gold and silver, are accessible to non-U.S. investors.

Users can deposit fiat currency, like U.S. dollars, into their accounts (or transfer other cryptocurrencies) for use on the platform. For smooth transfers, users can connect their bank account or opt to deposit funds via wire transfer. U.S. dollar withdrawals can be directly made to the user’s bank account. Once an account is set up, investors can buy or sell assets on eToro’s web-based platform or its user-friendly app. If you’re uncertain about what to invest in, you can utilize the CopyTrader feature to mirror the trades of one of the traders in eToro’s Popular Investor program.

If you’re reluctant to invest your hard-earned money immediately, eToro serves as an excellent learning platform. eToro users are provided with a demo account credited with $100,000 in a “virtual portfolio.” This allows you to learn about and experience cryptocurrency investing and other types of trading without any risk.

Fee Structure

Cryptocurrency platforms and brokerages impose a range of fees, including charges for deposits, withdrawals, and trading activities. Here’s a brief rundown of eToro’s non-trading fees:

Trading Fees

eToro doesn’t impose trading fees for stocks and ETFs, but it does charge a 1% fee for buying or selling cryptocurrencies. Additionally, a variable spread is applied to every trade. A spread is the gap between the bid price and the ask price on the platform. For instance, if you were to purchase $100 worth of Bitcoin on eToro, you’d incur $1 in fees, plus the spread. While these fees are higher than some cryptocurrency platforms, they are not the highest in the market.

eToro’s website provides a breakdown of its fee structure, but it’s not transparent. The actual cost of a transaction isn’t clearly specified. While eToro does offer information about its fees, the details can be unclear, making it hard to determine the exact cost of a trade. In contrast to other crypto platforms that clearly show the fee, eToro seamlessly integrates it into the displayed price on the screen. You can cross-check this by comparing the asset price provided by eToro with a crypto data website.

Cryptocurrency Selection

eToro provides over 25 different cryptocurrencies for U.S. investors. While U.S investors can purchase Bitcoin and Ethereum, they are unable to buy many top twenty cryptos such as Cardano (ADA), Solana (SOL), and Polkadot (DOT). Compared to exchanges dedicated solely to cryptocurrencies, this selection might not be as vast. However, when juxtaposed with crypto brokerages that also deal in stocks and other assets, it’s quite comprehensive.

eToro offers around 75 cryptocurrencies for non-U.S. investors. For crypto investors outside the U.S., the selection includes nearly all of the top 20 cryptocurrencies by market capitalization. While some crypto exchanges provide 200 or more different coins and tokens, eToro’s offering remains significant. Investors have access to smart contract cryptocurrencies, gaming, metaverse, and DeFi tokens. However, it’s worth noting that stablecoins like Tether (USDT) and USD Coin (USDC) are not included in eToro’s selection.

Is Your Cryptocurrency Safe with eToro?

In short, yes, as much as cryptocurrency assets can be secure on any crypto platform. Most major exchanges, including eToro, store the bulk of their cryptocurrencies in cold storage. This means they keep them on servers that aren’t connected to the internet. The company maintains a certain amount of crypto in “hot wallets” to ensure liquidity. Additionally, eToro implements several security measures at the user level, such as Two-factor authentication (2FA) and account encryption.

eToro operates under the regulatory oversight of multiple global authorities. In the U.S., it is regulated by both the Financial Industry Regulatory Authority (FINRA) and the Financial Crimes Enforcement Network (FinCEN). In the U.K., eToro falls under the jurisdiction of the Financial Conduct Authority (FCA). For U.S. investors, the platform provides an added layer of security as cash funds deposited are insured by the FDIC up to a limit of $250,000, safeguarding against potential platform failures.
Unlike some top cryptocurrency exchanges, eToro does not have third-party insurance for crypto assets on its platform. Users in Europe and some other countries benefit from free insurance from Lloyd’s of London on non-crypto assets, but it would be beneficial to extend this to crypto assets for all users worldwide.

eToro has an external crypto wallet called eToro Money for users who want to transfer their crypto off the platform.

Some crypto investors opt to keep their funds on the exchange where they made the purchase, using what’s known as a custodial wallet. While this is certainly more convenient, it does come with risks – if eToro were to suffer a collapse or a hack, your funds could be at risk. On the other hand, using a non-custodial crypto wallet isn’t suitable for everyone. Transferring your crypto around incurs fees, which vary depending on the specific crypto being moved. The wallet doesn’t support all the same cryptocurrencies as the exchange. It’s also important to note that once you transfer your funds to the eToro wallet, you’re unable to transfer them back to the main trading platform.

eToro is Suitable for You If:

• You’re seeking a platform to buy and sell a good selection of cryptocurrencies along with other assets such as stocks and ETFs.
• You’re interested in social trading and want the ability to copy the moves of profitable traders with strong track records of outperformance.
• You reside in one of the states where eToro is available.