eToro actually began back in 2007 with three entrepreneurs who wanted to make trading more accessible for every day users.
At the same time, they wanted to reduce dependency on banks and other traditional financial institutions. eToro started off as an online trading platform with graphs representing financial instruments and an intuitive interface. In 2009, eToro launched the trading platform, WebTrader, with a range of professional tools for traders of all skill levels.
- A big step forward came in 2011 with OpenBook, the first social trading platform in the world. This included the then-new CopyTrader feature, which let anyone copy successful traders.
- In 2012, eToro added stocks to its other assets, like currencies and commodities.
- The eToro mobile app launched in 2013 for both Android and Apple, expanding the reach of the platform. This is also when eToro dipped into crypto, making it possible to trade Bitcoin via CFDs.
- In 2015, the platform updated the interface for an even more innovative and intuitive experience.
- In 2016, it added CopyPortfolio, managed portfolios that bundle various assets or top traders within a market strategy.
- In January of 2017, eToro expanded its reach in the world of cryptocurrency by adding support for trading crypto to the platform. It began with a range of popular cryptocurrencies, including Ethereum, Litecoin, and XRP.
- In 2019 they launched eToroX, a full crypto to crypto exchange.
Which Cryptocurrencies Does eToro Support?
Compared to other platforms, the options for supported cryptocurrencies on eToro are relatively limited. This is a result of its nature as a general trading platform as opposed to one focused solely on cryptocurrency. Even so, you can short or own the most popular cryptocurrencies. Supported options include Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, and Ripple.
Cryptoassets are highly volatile unregulated investment product. No EU investor protection. Your capital is at risk. Indicative prices; current market price is shown on the eToro trading platform
Who Can Use eToro?
eToro can be used by anyone, as long as it is legal to do so in their country. eToro keeps a running list of countries where the platform is blocked due to changes in the regulations that conflict with trading laws.
This means that those in the United States, Canada, Cuba, Japan, North Korea, Iran, Syria, Turkey, Serbia, Albania, and Sudan cannot legally use eToro.
The broker is authorized through Cyprus Securities & Exchange Commission (CySEC) and is compliant with European Securities and Markets Authority (ESMA) rules, but the Cyprus domicile could be a matter of concern for some traders who remember the republic’s financial crisis in 2012. eToro is also licensed by U.K.’s Financial Conduct Authority (FCA), which requires more thorough risk disclosures. The fine print admits the broker can hold client funds in banks outside the European economic area, increasing risk in case of a bank default, but they provide EU and U.K. broker default protection up to €20,000 or £50,000.
They offer no guaranteed stop-loss protection or additional coverage through private insurers while an inadequate order entry interface lacks risk management features other than stops and trailing stops. Stop losses for cryptocurrencies cannot be lower than 25% of exposure, further limiting customization while increasing investor risk. ESMA rules that went into effect in Aug. 2018 dictate negative balance protection so clients can’t lose more than 100% of their account value. Security features include phone-based two-tier authentication and standard SSL encryption. Extensive documentation on best execution and conflict of interest policies builds confidence, but the broker acts as a market maker and counterparty in all trades. Fee disclosures are extensive and easy to read, increasing transparency, but a marketing blurb stating that client funds are held only at tier-one institutions appears flawed, given fine print disclosures.
eToro is narrowly focused on its strength, namely social and copy trading, in-platform social sentiment data, as well as automated client and portfolio copy trading. They provide negative balance protection to professional clients as a voluntary incentive because it isn’t required under ESMA rules. The lack of a volume discount program keeps the platform from being less costly, though the company does offer an eToro Club program that provides some discounts and extra services based on account size. Head-to-head comparisons between the most popular forex brokers and eToro may give an unfavorable comparison if you are not considering this platform’s primary strength.
Even so, there are a few things the platform could improve on. Order management and guaranteed stop-loss protection would go a long way to reducing the risk of large losses, especially with cryptocurrency coverage that has limited stop-loss functionality. These weaknesses could also be addressed by an API interface or VPS hosting on platform alternatives, but these options aren’t available. The platform is therefore strong for those looking to rely primarily on piggybacking the portfolios of advanced clientele (in the CopyTrader program) or on proprietary algorithms (robo-advisor in the CopyPortfolios program).
As of March 7, 2019, eToro has launched their blockchain wallet for both Android and iOS, which will now be available in 31 U.S. states. The platform offers up to 15 different cryptocurrencies in the U.S. and 16 in other countries. Available cryptocurrencies range from Bitcoin (BTC) to Stellar Lumens (XLM). This new feature broadens their offerings to U.S. traders but makes their focus on crypto evident. It’s important to note that in the U.S., eToro only provides its customers with access to cryptocurrencies. Those outside the U.S. have the ability to trade forex, CFDs, stocks, and cryptocurrencies.
Web & Desktop Trading Platforms
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This is not investment advice. eToro uses a proprietary platform which they have built in house and are constantly working on. The platform allows for individual trading as well as social trading from a single trading screen. There is no software to download and to install. You can access the platform directly using your web browser.
To trade individually, simply click on “Trade Markets” in the function menu on the left side of the trading screen. Once you have done that, you will be presented with a list of available assets grouped according to categories. Click on the selected asset to call up the trading chart. Alternatively, you can just click on the “Buy” and “Sell” button located on each of the asset icon. Self trading option comes with detailed charts that include a wide selection of indicators and customizable parameters. You can view sentiment indicators and select on assets to add to your watchlist.
IF you wish just to copy trade, click on “Copy People” to call up the list of traders that you can copy from. Just click on the individual picture to view their profile in more details.
As mentioned earlier, eToro also allows you to potentially earn by being a leading “Investor” where you can gather a following of copy traders who will follow your trades. By becoming a popular investor, you will get to earn a 2% management fee on your followers’ portfolios.
Mobile trading apps available for both iOS and Android. You can access all the key features of the web-based platform including browsing traders, strategies and assets, managing your account and executing trades.
eToro has provided its clients with a mobile-friendly version of its social trading platform. Depending on the operating system of your mobile devices, you can download the app for free at Google Play Store and Apple App Store. Here you can access all the key features of the web-based platform including browsing traders, strategies and assets, managing your account and executing trades.
eToro now offer a multi-crypto on-chain wallet. The phased roll out will see the feature opened up country by country, and the available list of cryptos will also expand as time goes on.
The wallet offers high level of security, with multi-signature sign in supported – this means users can view their blockchain transactions without having to expose their private key. It will also allow the conversion of one crypto to another. Four cryptos will be included at the launch (Bitcoin, Bitcoin cash, Ethereum and Litecoin). Others will be added as the app scales up. Conversion will initially be limited to Platinum Account holders, but ultimately expanded to all traders.
Deposit & Withdrawal
There are several ways which you can fund your trading account at eToro. At present the supported methods include deposit through credit cards such as VISA, Mastercard or Diners. eWallets such as China UnionPay, Neteller, PayPal, Skrill, WebMoney and Yandex are also available for traders to deposit their funds with. For traders who do not possess a credit card or eWallet, they can also fund their trading account through a bank wire transfer.
Processing of withdrawal requests typically takes 3 business days. However, traders should ensure that the withdrawn amount should be a minimum of $50, or else their withdrawal requests will be rejected. Take note that eToro charge their clients a withdrawal fee of $5 for every withdrawal made (recently reduced). Apart from the withdrawal fee, an additional cost to traders will be the currency conversion fee. At present, the conversion fees are as follows:
- AUD/USD: 100 Pips
- CAD/USD: 250 Pips
- EUR/USD: 250 Pips
- GBP/USD: 50 Pips
- JPY/USD: 250 Pips
- RMB/USD: 50 Pips
- RUB/USD: 50 Pips
If you are a beginner trader who is just starting out, then eToro will be the right broker to trade with. The ability to conduct social trading is indeed a feature that can greatly enhance the profitability of a beginner trader. However if you are an experienced trader looking to day trade, then eToro might not be the right fit. This is due to the fact that that the spreads charged by eToro are higher than average. In addition, as a day trader that relies on small margins and a large number of trades to make an overall daily profit, the additional cost incurred will erode away at any gain that is made from day trading.