Last update: Apr 28, 2021
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eToro Review 2021: Pros, Cons, Fees And More

Our eToro exchange review rating
3.9/5

A trading platform shaped like a social network, that’s the main idea behind eToro. Using this social trading platform. you can interact with traders with a similar level of experience as yours, and get tips from experienced traders. They’re encouraged to engage by the Popular Trader Program that we’ll cover later.

  • eToro


    1. Operating Since 2006
    2. Currencies Supported 16
    3. Fees No deposit fees, $5 withdrawal fee. Plus, spread fees.
    4. Deposit methods Bank and wire transfers, credit and debit cards, PayPal, Skrill, China UnionPay, Neteller, Klarna, and iDEAL
    5. Fiat currencies Yes
    6. Verification methods KYC
    7. Margin trading Yes
    8. Futures trading No

Another characteristic is eToro’s transparency, everyone can see everyone’s transactions. This is a huge advantage over traditional cryptocurrency exchanges and other trading platforms.

What eToro is famous for, though, is copy trading. They’re the creators of a feature that allows you to copy strategies and portfolios from big players with incredible track records. You set up a budget, and the system uses it to automatically mimic the successful trader of your choice.

Which doesn’t guarantee earnings, but, at the very least, seems like an educational experience like no other.

As you can see, this is not your typical cryptocurrency exchange. You can use eToro to trade stocks, ETFs, bonds, CFDs, commodities, etc. Or, to put it in another war, selling Bitcoin is only a small part of eToro’s business. But that’s the part we’re going to focus on because that’s what this site is about.

Let’s get into it, there’s a lot to cover. But first…

eToro's history

eToro

Its founders are David Ring and the Assia brothers, Yoni and Ronen. Currently, Yoni Assia serves as CEO.

Born in Israel as RetailFX in 2007, this fintech company really made its name in 2010 when they released CopyTrader and became a social trading platform. In 2014, eToro added cryptocurrencies to their offer and haven’t looked back since. In this regard, their service comes with special characteristics. More on that later.

Nowadays, their main technological hub is still in Tel Aviv, but they have offices in the UK, Australia, USA, and Cyprus.

In terms of compliance with the law, they’re unmatched. They’re fully regulated by the FCA (Financial Conduct Authority) in the UK, ASIC (Australian Securities and Investments Commission) in Australia, FinCEN (Financial Crimes Enforcement Network) in the US, and CySEC (Cyprus Securities and Exchange Commission) in the rest of Europe.

This multi-asset investment platform is a global phenomenon that celebrated 20 million registered eToro users from more than 100 countries as recently as March 2021.

Their CEO recently announced plans to evolve into a publicly-traded company later this year. If they succeed, eToro’s stock will “begin trading on the NASDAQ under a new ticker symbol in 2021.

That brings us to…

eToro’s recent news

  • A still-unnamed institutional investor in The US bought eToro’s shares in the secondary market that raised the company’s valuation to $2.5 Billion.
  • eToro plans to go public before 2021 ends. The IPO is possible following a merger with a special purpose acquisition company, or SPAC. Nasdaq awaits.
  • After the IPO, the company expects a $10 Billion valuation.
  • The company recently got a FINMA membership, which will allow them to trade stocks and more in The United States. More on that later.
  • In March 2021, they hired Dan Moczulski to be their UK Regional Manager and Head of Business Development.
  • They signed a partnership with ZenLedger. Their aim is to help crypto traders fille their taxes in a user-friendly way.

Is eToro trustworthy?

Exchange
eToro

With eToro, you can build your portfolio using 14 different cryptocurrencies. However, the best features is the ability to copy other traders automatically using CopyTrader technology, so if you like what you see, you can do the same thing.

If you want to set your portfolio on autopilot based on other traders and how their portfolios are performing, sign up on the eToro website or download the Android or iOS app now!

3.9/5
Visit eToro

On the one hand, this company is as solid as they go and the brokerage service they provide is top-notch. They’re fully regulated by several bodies around the world and have a long history that’s unmatched in the crypto space.

On the other hand, the user isn’t ensured and the failsafe mechanisms the eToro platform provides investors with aren’t ideal. There are no stop-loss protection or significant risk management features. In any case, this lack of protection is not unusual when trading cryptocurrencies.

In fact, there’s no protection whatsoever for crypto investors that choose eToro.

Another factor to consider: if the company fails as a business, you get some protection from the previously mentioned governmental entities. It all depends on the jurisdiction you operate from. If you’re in the UK, the FCA could compensate you with up to £85,000.

Everywhere else in Europe, the CySec offers up to €20,000. Plus, eToro offers you negative balance protection for forex, spot, and CFD trading. Australians don’t have the same luck, since the ASIC doesn’t have a compensation stipulated.

If you’re in one of those three jurisdictions, you can get the company’s private insurance. Provided by Lloyd’s, you’ll get €1,000,000 if eToro goes bankrupt.

Is eToro a pyramid scheme?

This brokerage service is not a pyramid scheme. Nevertheless, it doesn’t have the best reputation online. Reports of people getting locked out of their accounts abound. And eToro has been fined by Canada’s OSC (Ontario Securities Commission) and by the CySEC (Cyprus Securities and Exchange Commission.)

But no, a pyramid scheme they’re not.

eToro Features at a Glance

  • The rule of thumb for eToro is: if you don’t use leverage to buy stock, ETFs, and cryptocurrency, you’re buying the real asset. If you do use leverage, you’re opening a CDF or a Contract For Difference.
  • The service offers over 2000 tradable products and assets; stocks, ETFs, bonds, CFDs, commodities, cryptocurrencies, etc.
  • You’ll have access to a virtual portfolio for educational purposes. Everyone can open a demo account with $100k of fake money to train with.
  • eToro offers a mobile app for trading on the go for the iOs and Android.
  • The company’s been gearing up to launch its own debit card for a couple of years now. The product is called eToro Money and it’s not yet available, but you can join the waiting list if you’re an eToro Club member.
  • To join the eToro Club you need to maintain a balance between $5k and $250k. You’ll get a wide range of benefits that include better fees, consults with an Account Manager, premium analysis tools, and access to VIP events.
  • CopyPortfolio: You can copy and invest in Top Trader Portfolios and Market Portfolios, these follow a theme instead of a person. The minimum investment for this is 5000 USD.
  • CopyTrader: Allocate funds and the system will automatically copy the movements of your trader of choice. You’ll be able to set stop losses.
  • Each trader’s profile comes with a Risk Score, so you’ll be aware of who you’re following.
  • The company’s Popular Trader Program uses incentives and perks to encourage successful and highly copied traders to share their knowledge with less experienced members.
  • The most important characteristic for blockchain enthusiasts is this one: you will only be able to withdraw your cryptocurrency purchases to the custodial eToro wallet. This mobile app is available for both iOS and Android.

Fees Breakdown

eToro Crypto

Since this is not Coinbase or your typical cryptocurrency exchange, eToro’s fee structure is a little different. That is, they only charge a withdrawal fee and if you use them for leverage.

Let’s start with the basics, though.

Is eToro really free?

As we’re about to see, it’s not.

The fees are steep if you use them for leverage in marginal trading and related instruments.

They’re very reasonable if you don’t, though.

Trading and Withdrawal fees

eToro doesn’t charge deposit fees or unleveraged trading fees.

They charge a 5 USD fixed withdrawal charge.

There are no commission fees, no management fees, no clearance fees.

If you borrow money from them, though…

Spread and overnight fees

If you used eToro for leverage, you’ll have to pay interest.

eToro charges fees on the spread, that is, the difference between the price you buy at and the price the broker sells at. The company gets 0.75% of that transaction.

If you win, they get a cut. If you lose, they get a cut. And that’s eToro’s business.

Also, there’s a daily overnight fee. On a weekday, you pay 0.24 per each 1.000 USD of leverage. On the weekend, multiply that by three.

Volume

This company’s growing fast. Their total volume for last year was 400% bigger than in 2019. In 2020, they reported a trading volume of a whooping 1.5 trillion USD and 600 million in gross profit.

And take into account that in that same report they claimed to have 17 million registered users. That means that they’ve grown their user base by three million in the first three months of 2021.

Another 2021 stat worth noting is that eToro reports a 25x increase in crypto trading volume from the same period in 2020.

Supported currencies

It doesn’t matter where you are, eToro only operates in USD. If you fund your account using any other currency, be prepared to pay a currency conversion fee.

Supported countries

eToro is a global social trading platform, but for several legal reasons it doesn’t operate in the following countries: Afghanistan, Albania, Belarus, Bosnia and Herzegovina, Botswana, Brunei, Burundi, Canada, Chad, Congo Republic, Crimea, Cuba, Ethiopia, Guyana, Guinea & Guinea-Bissau, Iran, Japan, Laos, Libya, Mali, Myanmar, Namibia, Nicaragua, North Korea, Palau, Samoa, Serbia, Somalia, Sudan, Syria, Turkey, Uganda, and Yemen.

Is eToro available in the US?

So far, there’s no stock trading in the United States. Users in that area can only use eToro to buy and trade cryptocurrencies.

This will change in the near future, though. In July 2020, the company announced it was finally a FINRA member. The Financial Industry Regulatory Authority is a private organization that falls under the competence of the Securities and Exchange Commission.

That FINRA membership will allow eToro USA LLC to become a multi-asset trading platform inside the United States.

Supported cryptocurrencies

eToro Cryptocurrencies

So far, eToro offers these 16 varieties of cryptoassets:

Bitcoin (BTC, )Ethereum (ETH,) Litecoin (LTC,) Ripple (XRP,) Cardano (ADA,) Dash (DASH,) Stellar Lumen (XLM,) Eos (EOS,) Binance Coin (BNB,) Ethereum Classic (ETC,) Bitcoin Cash (BCH,) IOTA (IOTA,) TRON (TRX,) ZCASH (ZEC,) NEO (NEO,) and Tezos (XTZ.)

Deposit methods

You can fund your account with almost every method available. From bank transfers to wire transfers, to credit cards and debit cards. On the digital side, you can use PayPal, Skrill, China UnionPay, Neteller, Klarna, and iDEAL.

They charge zero deposit fees, but, remember that if you use anything other than the US Dollar you’ll have to pay a currency conversion fee.

In certain markets, the first deposit has to come from a bank, be it from a transfer or a card. After that, you can freely use online payment systems.

Minimum deposits

In most of the world, the minimum first deposit is $200. After that, the minimum is $50.

The exceptions are Israel, where the minimum is $10.000; Algeria, where it’s $5.000; The US, where is just $50.

FIAT Currencies

You can definitely use Fiat money to fund your eToro account and get into those CFDs.

Other features

Forex

Using your eToro trading account, you can participate in the Foreign Exchange (or FX or Forex) and trade one fiat currency for another.

Customer Support

Using eToro can be complicated. There’s a live chat function to contact Customer Support, but it’s really hard to find. The best way to reach it is by performing a Google search. Be aware that it’s not available on the weekends, though.

The straightest line to reach Customer Support is to open a ticket in the Help Center and wait. It could take a while, though,

Both of those options are only available to registered users. Outsiders will need to open an account to even ask a simple question.

Verification

You’ll have to go through the KYC process to verify your account. eToro will ask you to upload some kind of government-issued ID as proof of identity and a receipt in your name as proof of address.

Conclusion

This website’s functionality and social trading capabilities are like no other, but let’s be honest.

A custodial exchange is not a real cryptocurrency exchange. If the company gets to keep your keys even if you transfer your crypto to their eToro wallet, what are we really doing here?

This brokerage service might be useful for traditional market enthusiasts who want to dabble in Bitcoin trade, but there are many options on the market better suited for cryptocurrency traders.

Even if their leverage is what you need, there are other platforms that offer marginal trading with better pricing and much lower fees.

Now, if what you want is to interact with other traders a la social media or to play with eToro’s advanced toys and instruments, suit yourself. Just be aware that you’ll have to transform your earnings into Fiat to be able to withdraw them.

author Andrej Ilisin

A serial entrepreneur working primarily with digital assets. He's the CEO of Sharp Capital, a company that focuses on growing online businesses. Andrej is also huge crypto, chess, and CrossFit enthusiast.