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eToro Review: A Social Trading Platform With Some Unique Features

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One of the newest cryptocurrency platforms available in the United States, eToro offers more than a dozen cryptocurrencies. It comes with a unique social trading feature that lets you copy the trades of other investors. And unlike most rivals, the eToro platform has a straightforward pricing structure traders and investors will find appealing. To learn more about this exchange and see how it compares to other cryptocurrency platforms, keep reading our eToro review.

Ratings Methodology

Bottom Line

The versatile trading platform is a standout, as is the CopyTrader feature that allows you to copy your favorite investors. To top it off, the transparent fee structure is both competitive with the industry and easier to understand.

Fees:

1% fee for buying or selling crypto

Account Minimum:

$50

Special Offer

Trade $100 get $10

Open Account for eToro

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

eToro
Open Account for eToro

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

Full eToro review

This cryptocurrency exchange is a good fit for: Serious cryptocurrency investors and traders looking for a full-featured platform and a straightforward pricing structure.

Pros

  • Popular coins that aren't on other major exchanges
  • Users can copy trading done by other investors
  • User-friendly app
  • Straightforward fee structure
  • Demo account

Cons

  • High fees on some digital currencies
  • Only available in 43 states
  • Lack of stocks and other investment options

Top perks

CopyTrader

One of the more unique features of the eToro platform is its CopyTrader feature. Essentially, this allows eToro users to copy trading done by their favorite high-performance traders with one click. Just set the amount of money you want to use. eToro automatically allocates those funds proportionally to mirror the positions of your favorite eToro trader. And there are no management or other fees charged by this social trading platform. To use this trading tool, users can choose to copy just one successful trader or as many as 100 at the same time.

Straightforward pricing

Some of eToro's rival cryptocurrency exchanges have difficult-to-understand pricing structures. They often charge both a spread and transaction fee, depending on the size of the trade. eToro makes its money based entirely on the spread, which is the difference between the buy and sell prices of the cryptocurrencies on its platform. The spreads are variable and can change, but eToro is transparent about how much it takes.

While it isn't as strong as some rivals, eToro offers a selection of more than a dozen cryptocurrencies. But unlike some of its rivals that have more options, eToro offers virtually all of the most popular cryptocurrencies for trading on its platform. As an example, the Gemini exchange offers a greater number of cryptocurrencies, but some popular coins like Cardano and Stellar are not supported.

Stock investing has arrived

There are only a few places where you can trade cryptocurrencies and stocks in the same place, and those that offer both tend not to have an excellent cryptocurrency selection. eToro offers perhaps the best selection of digital assets that can be combined in the same account as stock investing. eToro offers zero-commission stock trading with the ability to buy fractional shares. And if you're new to investing or just want to see if the platform is right for you, eToro offers a virtual brokerage account to let you test-drive it without putting real money at risk.

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What could be improved

Limited selection of cryptocurrencies

Compared to the best cryptocurrency exchanges, eToro doesn't have the widest selection. Other major U.S. based exchanges offer dozens of cryptocurrencies on their platforms.

High fees on some digital currencies

If you're buying and selling Bitcoin, eToro's spread isn't too bad. But if you're interested in some alternative cryptocurrencies, the fees can be much larger. Spreads on cryptocurrencies other than Bitcoin range from 1.9% to 5%.

Lack of stocks and other investment options

While eToro is truly a multi-asset trading platform overseas, that isn't the case yet in the United States. The company plans to offer stock trading to U.S. customers in the not-too-distant future. However, for the time being, it is purely a cryptocurrency platform as far as U.S. users are concerned.

Only available in 43 states

All U.S. residents can sign up for a virtual trading account. However, there are only 43 states (along with Washington D.C. and the Northern Mariana Islands) where you can use real money to buy and sell cryptocurrencies. Delaware, Hawaii, Minnesota, New Hampshire, New York, Nevada, and Tennessee customers currently cannot trade with eToro. The company aims to have 50-state availability eventually. Until then, some traders will have to look elsewhere.

Alternatives to consider

If you want to trade stocks and cryptocurrencies in the same place: Robinhood offers trading in stocks and options, including fractional shares. In addition, it offers 7 different cryptocurrencies and charges no transaction fees.

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 looking into. It offers 51 different cryptocurrencies for trading and has an excellent platform for advanced traders. Coinbase has a complex (and often expensive) fee structure, but there's still a lot to like about this platform.

How eToro works

eToro is purely a cryptocurrency exchange. Users deposit fiat currency, such as U.S. dollars, into their accounts (or transfer other cryptocurrencies in) to use on the platform. For seamless transfers, users can link their bank account or can choose to deposit funds via wire transfer instead. Withdrawals of U.S. dollars can be made directly to the user's bank account.

Once an account is established, cryptocurrency trading can be done on eToro's web-based platform, or on its user-friendly app. If you don't know what to buy, you could use the CopyTrader feature to replicate the trades of one of the traders in eToro's Popular Investor program.

And if you don't want to dive right into cryptocurrency trading with your hard-earned money, eToro is a great place to learn. eToro users get a demo account that is credited with $100,000 put in a "virtual portfolio." This lets you experience cryptocurrency investing and trading without the risk while you're learning.

Fees overview

eToro prides itself on offering transparent pricing that is easy to understand. Instead of charging a complex two-part fee structure like some of its rivals, eToro makes its money from a spread between the offer price and the asking price on its platform.

For example, a cryptocurrency that eToro is willing to pay $20 for and is willing to sell for $20.20 would have a 1% spread.

The spread depends on the particular cryptocurrency, and here's what you can expect for the cryptocurrencies available on eToro:

Cryptocurrency Spread
Bitcoin 0.75%
Ethereum 1.9%
Bitcoin Cash 1.9%
Dash 2.9%
Litecoin 1.9%
Ethereum Classic 1.9%
Cardano 2.9%
IOTA 4.5%
Stellar 2.45%
EOS 2.9%
NEO 1.9%
TRON 3.5%
Zcash 3.5%
Tezos 5%
Binance Coin 2.45%
Uni 3.9%
As of April 26th, 2021

Cryptocurrency selection

eToro offers 16 different cryptocurrencies for buying and selling on its platform. Here's the full list:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Bitcoin Cash (BCH)
  • Dash (DASH)
  • Litecoin (LTC)
  • Ethereum Classic (ETC)
  • Cardano (ADA)
  • IOTA (MIOTA)
  • Stellar (XLM)
  • EOS (EOS)
  • NEO (NEO)
  • TRON (TRX)
  • Zcash (ZEC)
  • Binance Coin (BNB)
  • Tezos (XTZ)
  • Uni (UNI)

Is your cryptocurrency safe with eToro?

The short answer is yes, but the eToro trading platform doesn't have quite as much protection in place as some of its larger rivals.

Like most major exchanges, the majority of cryptocurrencies stored on eToro's platform are kept in cold storage, meaning the majority of crypto is kept on servers not connected to the internet. The company maintains some crypto in "hot wallets" for liquidity purposes.

It's unclear if U.S. customers are insured against platform breaches. However, its European insurance policies specifically exclude crypto assets.

It's also worth noting that cash balances are insured for U.S. customers. eToro holds funds for U.S. residents in FDIC-insured custodial accounts and therefore are insured for up to $250,000.

Finally, like all other cryptocurrency platforms, there's no protection in place if your account gets breached. So it's extremely important to protect your passwords and other authentication measures.

eToro is right for you if:

  • You want a place to buy and sell a good selection of cryptocurrencies, with a straightforward fee schedule.
  • You enjoy social trading and want the ability to copy the moves of profitable traders who have strong track records of outperformance.
  • You live in one of the 43 states where eToro is available.

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