What if you could get to invest in stocks and cryptocurrency on a single platform? And that too while engaging with and learning from a community of traders? This is what, eToro, a Tel Aviv-based social trading and investment company promises to deliver.
eToro is not just about trading. Here, you can discover assets and share ideas and strategies with millions of like-minded individuals from over 140 countries. It offers diversified exposure to users while making trading fun and easy to understand. But is eToro good for long-term investment? Is it even legit? Is crypto trading on eToro safe? If you have questions like this about eToro, read on to learn more about the brokerage.
Brief History
eToro was founded in Israel in 2007 by brothers Yoni Assia and Ronen Assia along with David Ring. It was initially an online trading platform that visualized making trading easy and fun with a graphic representation of financial instruments.
eToro released its WebTrader platform in 2009. It enabled users to trade financial assets online and included tools for both beginners and advanced traders. In 2010, eToro’s OpenBook which was the world’s first social trading platform was launched.
Stock trading was introduced on eToro in 2013 and Bitcoin trading was added in 2014. Crypto trading was further expanded in 2017 when it added popular cryptocurrencies such as Ether and Litecoin. Going from strength to strength, eToro entered the US market in 2018 with 10 cryptocurrencies on offer.
eToro money was launched in 2021 with instant withdrawals and zero FX conversion fee. It also started offering stock investments to US users at the beginning of 2022 with zero commissions. The platform now boasts of a 30 million strong user base and offers 3,000+ assets for trading and investment.
Cryptocurrencies Available on eToro exchange
eToro is primarily a social trading platform and it has limited cryptocurrencies in its kitty. Non-US users have the option to invest in any of the 75+ cryptocurrencies it offers. US users, however, have access to only 30 coins on eToro.
eToro carries most of the major cryptocurrencies such as:
- Bitcoin(BTC)
- Ethereum(ETH)
- Litecoin(LTC)
- Cronos(CRO)
- Dash(DASH)
- Cardano(ADA)
- Polkadot(DOT)
- Tron(TRX)
- Dogecoin(DOGE)
eToro Fees
eToro has an open and transparent fee structure. It has no hidden charges and even helps users understand where the prices are coming from.
Cryptocurrency Trading Fee
eToro charges a 1% fee for buying and selling crypto assets. While the platform does not charge any fees for sending or receiving cryptocurrencies, blockchain fees may be applicable on the same. Crypto-to-crypto conversions involve conversion fees of 0.1%.
Stock and ETF Fee
eToro does not charge any commission fees for selling or buying stocks. While authorities such as the Securities and Exchange Commission(SEC) and Financial Industry Regulatory Authority(FINRA) do charge sellers regulatory fees, eToro covers the cost on behalf of its customers at present.
Options Fee
There is zero commission or contract fees on options trading on eToro. However, regulatory fees by the SEC and FINRA are charged on options trading. This includes an Options Regulatory Fee(ORF) of $0.0427 per contract, SEC fees, and sales of securities incur FINRA Trading Activity Fee, all of which are passed on to the client.
Deposit and Withdrawal Fee
There are no fees for deposits on eToro but it does charge a withdrawal fee of $5. Additionally, Platinum, Platinum+, and Diamond Club members are not charged any withdrawal fee. Deposits and withdrawals in currencies other than the USD also incur a conversion fee.
Inactivity Fee
A $10 per month inactivity fee starts being charged on the available balance in the account if there has been no login for the past 12 months.
eToro Security Review
eToro is a heavily regulated entity and adheres to the standards set by the Financial Industry Regulatory Authority(FINRA) and Financial Crimes Enforcement Network(FinCEN) in the US, the Financial Conduct Authority(FCA) in the UK, the Cyprus Securities and Exchange Commission(CySEC) in the EU and the Australian Securities and Investments Commission(ASIC) in Australia.
It holds cash assets in different locations for each type of account and they are FDIC insured to protect the customers’ funds in case of the failure of an FDIC-insured bank. This, however, does not protect against the failure of eToro itself or malfeasance by any of its employees.
Like most cryptocurrency exchanges, it holds users’ crypto assets in both hot and cold storage. It also encourages customers to enable 2-factor authentication(2FA) for added security. It also uses encryption and masking technologies to rate limit account operations and secure users’ personal and financial information.
The platform further states that none of its employees are authorized to transfer crypto out of the cold storage system. It also says that it uses state-of-the-art monitoring tools to prevent fraud but does not elaborate further.
eToro Pros
Established Platform
eToro was founded in 2007 and is an established and well-known brokerage and social trading platform. While the US version may have limited products in comparison to its international counterpart, there is still enough to pique the interest of both novice and seasoned traders.
CopyTrading
eToro was one of the first platforms to offer copy trading. Here, traders can simply copy the positions of high-performing traders without getting caught up in researching market trends or learning complex trading strategies. Its social trading features offer a unique communal trading experience.
Regulated Platform
While many crypto exchanges face regulatory scrutiny and have had spectacular failures(read: FTX), eToro stands out as a heavily regulated entity adhering to the standards set by various authorities such as SEC, FINRA, and ASIC.
Free Debit Card Deposits
While many platforms charge a fee for buying cryptocurrencies with a debit card, eToro has no such thing. Although a conversion fee may be charged if the transactions are in currencies other than USD.
Educational Resources
The eToro Academy has some extensive educational resources for users. Along with guides for individual cryptocurrencies, it has educational videos and resources divided into beginner and advanced categories. It also has a regularly updated market news and analysis section.
Demo Trading
You can create a demo trading account on eToro credited with $100k to practice investing in diverse asset types. You can discuss strategies and build up your trading skills without the risk of losing any real money.
eToro Cons
Restricted in Many Countries
eToro is available in a limited number of countries and territories. It does not offer its services in countries such as India, Japan, Indonesia, Turkey, and New Zealand. Even in the USA, residents of Nevada, Hawaii, Minnesota, and New York cannot use eToro.
Limited Cryptocurrency Selection
eToro is primarily a social trading platform and as such, its cryptocurrency selection is limited. It offers only 78 cryptocurrencies to its international customers while US residents have access to only around 30 cryptocurrencies.
Cryptocurrency Trading Fees
eToro charges a flat 1% fee to buy and sell cryptocurrency. While not the highest, it is also not the most competitive fee. There are other exchanges that have a far lower crypto trading fee.
Limited ETF Selection
eToro’s appeal is dimmed by the fact that its ETF selection is somewhat limited. With only around 300 ETFs, traders are not exactly spoilt for choice on eToro.
Customer Service
eToro has an FAQ section where customers can find answers to their queries. They can also submit a Customer Service request ticket if they want further assistance and feedback from the eToro team. However, like most cryptocurrency exchanges, there is no phone number or email listed for the customers to contact the team.
eToro also has dedicated account managers to look after the most active and loyal users.
Customer Reviews
eToro has an impressive rating of 4.3 out of 5 on Trustpilot with 18,000+ reviews. Customers praise its user interface and believe it to be a platform suitable for both beginners and advanced traders. The personal touch added by dedicated account managers is also appreciated.
eToro is liked because it is easy to use and offers various perks
Users appreciate the assistance of knowledgeable and responsive account managers
Some users, however, have had less-than-stellar experiences with eToro. Poor customer service is a common complaint and some users have also complained of slow withdrawal times among other things.
Customers complain of expensive slippage on eToro due to which losses have occurred
Bad experiences with nearly non-existent customer service are a common complaint
eToro Frequently Asked Questions
Is eToro safe?
Yes, eToro is a safe platform. It secures user data with SSL encryption and keeps client funds in tier-1 banks. It is regulated by UK’s Financial Conduct Authority(FCA), Cyprus Securities Exchange Commission(CySEC), and Australian Securities and Investment Commission(ASIC).
Which Countries are blocked by eToro?
eToro is available in a limited number of countries and territories due to regulatory reasons. India, China, Japan, Ghana, Turkey, Saudi Arabia, New Zealand, Indonesia, Armenia, and Nigeria are some countries that cannot use eToro. Further, eToro does not provide services to US citizens residing outside the USA.
How Much does eToro charge to withdraw?
Withdrawals on eToro are subjected to a $5 fee. Further, withdrawals in currencies other than USD are subjected to conversion fees. However, Platinum, Platinum+, and Diamond Club members do not have to pay withdrawal fees.
Conclusion
There are very few platforms that offer stocks, ETFs, and cryptocurrency and eToro is one of them. Known for its copy trading services, it is a platform that gives a unique social trading experience. Though there have been a few controversies, eToro is generally regarded as a global and established company.
Whether you should put your money into it or not depends on your preferences and goals. It is always prudent to consult a qualified professional before making any decision. Since cryptocurrencies are extremely volatile and risky investments, it is all the more important to have a thorough understanding of all the aspects before investing money in them.