eToro Review – A Unique Crypto Trading Platform
Last updated: 2/17/19
eToro is a digital global trading platform for currencies, cryptocurrencies, commodities, indexes and stocks. It currently has over 7 million users worldwide. With an angle on cryptocurrencies in this review, I’ll take a hands-on look at the eToro platform and its pros and cons.
eToro is a pioneering trading company that puts an emphasis on cryptocurrency. It supplies users with an easy to use trading platform for investing in cryptocurrencies and a mobile wallet for trading and sending funds (but not for receiving them).
The company does a great job allowing people to invest easily in Bitcoin and a variety of other leading cryptocurrencies, with a variety of payment methods. Having said that, eToro is recommended for speculators only, as you can’t really access your assets but only trade them for fiat currencies.
If you want a more detailed review about eToro keep on reading. Here’s what I’ll cover:
- eToro Overview
- eToro Services
- Currencies and Payment Methods Supported
- eToro Fees
- Supported Countries
- Customer Support and Reviews
- My Personal eToro Experience
In operation since 2007, eToro’s service enables users to trade almost anything in one platform. Branded as a social investment network, it combines a modern trading system with the ability to interact with other users.
CEO Yoni Assia wants the platform to disrupt the outdated banking system and help usher in a new digital financial age. If you’re investing in cryptocurrencies, then there are probably some ideals to be matched in this respect. eToro enables the trading of a select number of cryptocurrencies.
The company went through many different cycles, the most recent one being the introduction of cryptocurrencies to their platform on February 2017. Ever since, the company has been actively promoting and sponsoring cryptocurrency activities throughout the world.
eToro’s platform allows users to invest in a variety of assets including commodities, stock, currencies, indices and of course cryptocurrencies. The main “twist” eToro added to its platform is the ability to follow and copy other traders, making eToro a social trading platform.
Copying traders and CopyPortfolios
Aside from deciding on your own what to invest in, eToro gives you two other options: Copy other traders or invest in a CopyPortfolio.
CopyPortfolio is a portfolio management product. It’s somewhat similar to investing in a specific index where someone chooses a mix of assets to invest in for you. Investing in it will automatically copy multiple markets or traders based on a predetermined investment strategy. You can invest in two types of CopyPortfolios:
Partner Portfolios – An investment vehicle Created by eToro partners.
Market Portfolios – Top performing assets from a specific market.
CopyPortfolios aim to help investors minimise long-term risk by creating diversified investments. Once you invest in a CopyPortfolio, your capital is professionally managed by eToro’s investment committee. Each CopyPortfolio’s performance is analysed in depth and rebalanced automatically to maximise its gain potential.
eToro also has a very special product called a CryptoPortfolio. It basically allows you to invest in the most popular cryptocurrencies like Bitcoin, Ethereum, Dash, Litcoin, Ripple and Ethereum Classic. The minimum investment for the CryptoPortfolio is $5,000.
Investing in this portfolio will expose you to more currencies simultaneously and diversify some of the risks involved with investing in only a single cryptocurrency. There are several requirements that a cryptocurrency has to meet in order to be included in the CryptoPortfolio:
- Minimum market cap of $1 billion
- Minimum average monthly trading volume of $20 million.
Each currency will have a weight in the portfolio that is equal to the size of its market cap (the minimum is 5%). If for some reason a currency drops below the minimum requirements, it is automatically removed from the portfolio.
The CryptoPortfolio is analyzed and rebalanced on the first trading day of each month.
eToro’s Cryptocurrency Wallet
eToro have also launched their own wallet for iOS and Android, allowing users to trade and transfer cryptocurrencies through their mobile phone. However, the wallet doesn’t seem to be a true cryptocurrency wallet but rather a better interface to eToro’s existing platform.
eToro’s wallet doesn’t give you full control over your funds by supplying you with a unique seed phrase or private key, which is what you get with a true wallet. Instead, it allows you to log into your eToro account and trade or send specific currencies through it. In the end, it’s eToro that stores your funds, and not the wallet itself. Having said that, you do have the option of sending funds outside of the wallet to a self hosted wallet.
While eToro’s wallet may be a good solution for beginners, it is not a good way to store large amounts of money if you’re serious about cryptocurrency.. At the moment, the wallet supports Bitcoin, Litecoin, Ethereum and Bitcoin Cash.
As eToro is not a cryptocurrency-dedicated exchange, there are currently only a select few cryptocurrencies available. That being said, what they do offer is a pretty decent collection—more than other notable names in the industry. Investment is done in the form of CFD, meaning you only speculate on the price (you don’t get to own the actual coins).
Here’s the complete list:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Dash (DASH)
- Ethereum Classic (ETC)
- Cardano (ADA)
- IOTA (MIOTA)
- Stellar (XLM)
- EOS (EOS)
- NEO (NEO)
- Zcash (ZEC)
- Binance Coin (BNB)
eToro supplies a wide range of options for depositing money to its platform including:
- Credit / debit card
- Wire transfer
- China Union Pay
- Local Online Banking
Minimum first time deposit is $200. eToro accounts are denominated in USD so whatever currency you deposit will automatically be converted to USD.
Due to the complex amount of trading options on eToro, the fee structure varies from asset to asset. Looking directly at the cryptocurrency trade fees will be quite a shock for serious investors.
Bitcoin costs a hefty 0.70% fee when exiting a position, higher than most other exchanges. Other altcoins trade at a 2%–4% fee which is pretty extreme. Check out the full list of fees here.
Keep in mind that there’s also a withdrawal fee applicable when you decide it’s time to cash out. You can only cash fiat money out of eToro, and you’ll be charged $25 for each withdrawal.
Another sting in the tail exists for some unfortunate users. eToro charges an inactivity fee to users who have not logged in for 12 months. If you’re a long-term holder, don’t get caught out by this; your account balance will be debited $5 per month once it’s deemed inactive. Remember to log in and check up on your investments every quarter.
eToro operates in the following countries:
UK, 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, Venezuela
Up until recently eToro was closed for US investors but today an open Beta is available for people within the following US states:
Utah, Pennsylvania, Massachusetts, Indiana, Wisconsin, Missouri, Maryland, Michigan, Colorado, N. Jersey, Arizona, Virginia, Washington, South Carolina, Georgia, Ohio, Iowa, Mississippi
While personally I haven’t encountered any issue with eToro, there’s a barrage of negative reviews that can be found online. Having said that, no exchange is free from this type of reviews.
Keep in mind, happy users rarely leave a review while angry users are usually motivated to share their experience. I suggest reading the reviews and judging for yourself if you feel this is a “red flag” in your book.
Customer support is available in 9 different languages and can be reached via an online helpdesk. There is no option for a live chat of phone support.
The usability of eToro is astonishingly fluid. It’s painless and straightforward to get started. Signing up takes less than five minutes, and there’s no need for slow verification methods or confirmations. Simply hit the Sign Up button and add your personal details.
Next, you’ll be greeted with a questionnaire to assess your trading personality—quite a nifty feature on the face of it, but it rang more alarm bells than I would have liked. Revealing my income levels, my employer and my other investment levels felt like a bit too much. Still, this is part of a standard KYC (Know Your Customer) process eToro is compelled to perform as part of it being a regulated company.
The system as a whole is smooth, with no lag or connection problems. After you sign up, deposits are made swiftly via credit, debit, or PayPal at no fee. You can start trading to a limit of $2,000 immediately without verification, which should be enough for most to do a little test of the service.
Portfolio trackers, watch lists, featured markets and the ability to follow successful traders are all sitting in this slick, modern trading interface. In under ten minutes, you can be ready to go and open positions on Bitcoin and Facebook simultaneously.
eToro’s platform as a whole is a joy to use. Its interface is responsive, intuitive, and packed with handy features. Add a decent selection of cryptocurrencies to this, and you can really get a lot out of the exchange. Within ten minutes you can be trading and opening positions in Bitcoin, Ethereum, Ripple, Litecoin, and more.
That being said, there are clearly some drawbacks. The main drawback being the fact that you don’t own the actual assets you invest in. If you need to hold the actual cryptocurrency you’re looking to buy, eToro is not the place for you. The fees for cryptocurrencies are also overpriced, and for me, that’s a big turnoff.
To sum it up, if you’re a speculator – eToro might be suited for your needs. If you’re a hardcore Bitcoiner – stay away from it.
Have you tried eToro yourself? I’d love to hear what you think about it in the comment section below.
- Suitable for beginners
- Intuative user interface
- Wide variety of popular cryptocurrencies
- Accepts multiple payments as deposits
- Offers additional investment products
- Slow support
- Withdrawal issues
- You can't cash out crypto (only fiat)
- Limited availability in the US
- Highly volatile unregulated investment product. There is no EU investor protection. Your capital is at risk.
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