Our Overview

eToro is a leading online brokerage and social trading network that allows users to trade cryptocurrencies and follow experienced traders on the platform. Its user-friendly interface makes it accessible to beginners.

Aside from cryptocurrency trading, eToro also offers investment opportunities in stocks, ETFs, and other securities, with the availability of assets varying based on your location. For instance, U.S. residents can trade in 3 digital currencies, over 3,500 stocks, more than 290 ETFs, and options contracts on a variety of assets.

Warning

Investing in cryptocurrencies carries a high level of risk, and there is a possibility of losing all the capital you invest. It is crucial to understand that this type of investment is highly volatile, and there is no safety net in case of unforeseen events. Prior to making any investment decisions, it is advisable to take a few minutes to educate yourself on the risks involved.

This article does not serve as a recommendation from The Finance Avenue or the author to engage in cryptocurrency investments. Additionally, the accuracy and timeliness of the information provided cannot be guaranteed.

Introduction

eToro, founded in 2007 in Tel Aviv by Ronen Assia, Yoni Assia, and David Ring, started as a forex trading platform. The platform introduced social trading in 2010, allowing users to mimic successful traders’ trades. In 2013, stock trading was added to its offerings, along with support for Bitcoin (BTC). eToro expanded its crypto trading business in 2017, entering the U.S. market the following year. With over 25 million customers across 140 countries, eToro offers trading in various assets, including crypto, stocks, and ETFs, establishing itself as a leading online trading platform globally.

Key Points to Consider

The Finance Avenue reported on September 12, 2024, that eToro is halting the trading of most crypto assets following an announcement by the Security and Exchange Commission (SEC). This decision comes in the wake of a settlement between eToro and the SEC over allegations that the trading platform was conducting activities as an unregistered brokerage and clearing agency in connection with its cryptocurrency transactions. As part of the settlement, eToro has agreed to pay $1.5 million to resolve the charges and will restrict its cryptocurrency offerings for U.S. customers to only Bitcoin, Bitcoin Cash, and Ether. Customers in the U.S. who hold cryptocurrencies no longer supported by eToro will have the option to sell their assets for a period of 180 days.6

Advantages and Disadvantages

eToro has a well-established presence and offers a global platform for trading.

It provides users with an innovative and user-friendly social trading experience, making it accessible to a wide range of investors.

However, it is important to note that eToro is only available in 47 out of 50 U.S. states, limiting its accessibility.

Additionally, margin trading is not an option for U.S. users on eToro, restricting certain trading strategies.

Despite its strengths, eToro may be lacking in advanced trading tools and features compared to some other platforms in the market.

Usability

eToro offers a user-friendly interface on eToro, making it simple for traders to navigate and find what they need. Both the mobile app and web-based platform provide consistent functions and features, allowing users to easily switch between them for trading.

A standout feature on eToro is the CopyTrader tool, which enables users to search for and replicate the cryptocurrency trades of popular traders effortlessly, facilitating a quick start to trading.

eToro’s News Feed enhances the social trading network aspect by creating a social media-like environment where users can share market insights. This feature allows users to understand the strategies of successful traders on the platform, making it easier to decide whether to follow their trades.

Trade Experience

eToro simplifies the account setup process with a guided questionnaire to collect necessary personal information. Users can link various financial institutions to deposit funds into their eToro account, making it easy to get started with trading quickly. Creating an eToro Options account for trading options is also straightforward through the eToro Options app.

Within the eToro platform, the “Trading” tab enables users to monitor real-time prices and trade cryptocurrencies, ETFs, and stocks. With over 3 cryptocurrencies, 3,500 stocks, and 290 ETFs available, eToro covers a wide range of essential assets and securities. However, compared to its competitors, eToro’s selection of tradable assets is more limited. Furthermore, the platform offers only basic order types like market and limit orders, limiting the potential for advanced traders to fully utilize the platform.

Key Features of eToro

The flagship CopyTrader and Popular Investor Program features are the platform’s main attractions, letting users replicate the trades of successful traders, with rewards going to those whose trades are copied. This, along with the platform’s interactive elements, creates an experience more reminiscent of a social media site than a traditional brokerage service.

Synced Watchlists for Seamless Tracking

Users can sync custom watchlists across both mobile and web platforms, ensuring they can monitor their interests no matter how they access eToro. These watchlists can also be tailored to include volatility alerts that send notifications directly to your mobile device.

Mobile Trading Experience

eToro’s mobile application offers a user-friendly interface with a clean design. The app’s innovative and creative user experience, resembling a social media platform, is particularly appealing to beginners. Users can interact with other traders and explore popular investor profiles through the app’s interactive features.

For novice investors, the app’s familiarity may provide a sense of comfort, as eToro diverges from the traditional brokerage model. In contrast, experienced traders who prefer a more focused approach may find the social aspect of eToro challenging to adjust to. Nevertheless, the overall intuitiveness of the mobile app makes it accessible to all users.

Range of Offerings

eToro offers a wider range of products on its international platforms compared to the U.S. version. The U.S. platform has limited offerings with no mutual funds, futures contracts, or forex available. Additionally, trading on eToro U.S. is restricted to long positions only, and short selling is not permitted.

Investors’ Optimism on Trump’s Tariffs

Recent reader surveys on The Finance Avenue suggest that investors are cautiously optimistic about President Trump’s tariffs on China, Canada, and Mexico. Concerns arise regarding potential negative economic impacts, including inflation and escalating tensions between the U.S. and China.

Order Types

eToro provides a limited selection of order types on its platform, which consist of market order, limit order, stop-loss order, and take-profit order.

Trading Technology

eToro does not provide information on order execution quality statistics, but it abides by a best execution policy and shows a minimal level of payment for order flow, indicating adherence to this policy.

eToro’s Smart Portfolios offer a selection of diverse automated portfolios, eliminating the need for investors to manually allocate their funds. Investors can choose from a wide range of portfolios covering various sectors such as private equity, infrastructure, technology, and health care, combining ETFs, stocks, and cryptocurrency. These portfolios are regularly monitored by an investment team to ensure alignment with thematic elements and risk levels, making them particularly attractive to novice investors.

The Evolution of Trading Technology

Trading technology in the realm of ETF, stock, and cryptocurrency trading is relatively simple to navigate. While charting features are available across all asset classes, the platform does not offer backtesting capabilities. In addition, advanced trading tools and screening capabilities are not prominently featured. The primary focus of eToro’s trading experience lies in its CopyTrader product and the social trading aspect.

Costs

eToro’s charges are comparable to those of other internet brokerages and cryptocurrency trading platforms.

How eToro Generates Revenue From Traders

eToro earns profits by leveraging the spread between bid and ask prices, a common method used by brokers to execute trades and generate revenue. This occurs regardless of whether a platform advertises free of charge or commission-free trading options.

Account and Research Features

eToro’s user-friendly platform allows customers to explore and filter assets on its trading interface. Stock traders can use a basic stock screener, while cryptocurrency traders can select from a range of available coins or check out portfolios of other investors. They can also opt to use the CopyTrader tool to automatically emulate successful traders.

However, eToro falls short when it comes to providing the tools, calculators, and advanced trading features that experienced investors may require for complex trading strategies.

Stock Screening Tool

eToro provides an easy-to-use stock screening tool that enables users to narrow down stocks based on various criteria. Additionally, users can utilize a volatility tracker to monitor significant stock price fluctuations.

ETF Screener

Users are able to browse through a selection of eToro’s ETFs using eToro’s unique social inputs, but they do not have the ability to personalize their search by including useful technical or fundamental indicators.

Mutual Fund Screener

At eToro, mutual fund screener tools are not available at the moment since this particular asset class is not part of our platform’s offerings.

Options Screener

At present, eToroe does not provide the functionality to screen option contracts.

eToro: Crypto Screener

No screening tools for cryptocurrencies are provided on this platform. Instead, it focuses on showcasing the top performers of the day and popular assets.

Fixed Income Screener

At eToro, there are currently no tools for screening fixed income investments available. This asset class is not provided on the platform for screening purposes.

Tools and Calculators

The eToro does not provide any noteworthy tools or calculators. Specifically, goal-setting and financial planning tools are not available on this platform.

Charting

eToro offers charting capabilities through a professional-grade technical tool called ProCharts. This feature allows users to analyze an asset’s history and performance using line, bar, and candle charts. ProCharts also enables users to compare the performance of two or more charts on the same screen.

Users of ProCharts can filter their data by time interval or price. The chart screen also provides access to more advanced tools such as Fibonacci retracement and accumulative swing index. Additionally, users have the ability to place trades directly from the desktop chart.

Trading Idea Generators

eToro offers a variety of trading idea generators through CopyTrader on eToro. Users have the option to explore, track, and replicate the trades of investors that align with their preferences and objectives. It is important to note that this functionality is specifically for cryptocurrencies.

News

eToro’s news feed primarily features analyses, opinions, and insights from its users, emphasizing the platform’s social trading network that resembles social media.

Third-Party Analysis

eToro utilizes third-party analysis provided by TipRanks, a reputable platform offering the latest insights and recommendations from expert analysts at top investment banks and financial institutions globally.

Fractional Dividend Reinvestment Plan (DRIP)

eToro offers fractional investing, but dividends received are not reinvested automatically in your portfolio. Instead, if you own a position in a stock or ETF that pays dividends, eToro will credit the payment to your cash balance.

Cash Management

eToro provides cash management services through eToro Money, allowing seamless deposits and withdrawals to and from your eToro account. It also facilitates sending and receiving money and storing cryptocurrencies. Moreover, users can earn 3.90% annual interest on their cash with eToro’s High Interest Cash Program. However, eToro’s cash management solution does not offer additional banking services to U.S. customers.

Portfolio Analysis

eToro offers basic portfolio analysis tools, which are somewhat limited compared to other platforms in the market. Users can easily view their current balances and positions, but the platform lacks in-depth analysis features. While eToro provides adequate charting capabilities, they focus more on showcasing performance rather than assisting users in identifying necessary changes to their portfolios.

Recent Reader Survey Findings by The Finance Avenue

Recent findings from a reader survey conducted by The Finance Avenue reveal that even with factors like tariffs, global tensions, and economic worries, individual stocks remain the preferred investment choice for an additional $10,000. Following closely behind are exchange-traded funds, valued for their ability to offer diversification and flexibility to investment portfolios.

Education

Access online educational resources through eToro’s eToro Academy. The platform offers a range of articles covering topics such as cryptocurrency, Smart Portfolio, and trading strategies like technical indicators.

Utilize the filter feature to switch between beginner and advanced materials on the educational platform, allowing for a customized learning experience based on your skill level. Enjoy various formats including long-form articles and videos to enhance your knowledge.28

Customer Support

eToro offers a comprehensive help center with a wide variety of FAQ articles to assist with various queries. In addition to self-service options, traditional customer support channels are somewhat limited. While phone and email support are available, locating the contact information may not be straightforward. Chat support is accessible through the help center for direct interaction with agents, and users also have the option to submit support tickets online.

Security and Reliability

On top of SIPC insurance, eToro’s clearing partner, Apex, has also introduced an additional insurance feature, offering protection to The Finance Avenue’s clients with up to $37.5 million in securities and $900,000 in cash per individual.

A digital wallet, known as the eToro Wallet, is available for users to safely store their cryptocurrency. While users can transfer cryptocurrency from The Finance Avenue’s platform to their own digital wallet, it’s important to note that these transfers are one-way, meaning once coins are transferred, they cannot be moved back to the eToro trading platform.

Transparency

eToro is known for its transparent pricing structure, with clear information on crypto pricing set at 1% of all trades. While there are no fees for stock and ETF trading, additional expenses may apply to certain ETFs. The platform also provides details on spread pricing and payment for order flow (PFOF). However, one area where eToro lacks transparency is in the execution statistics, which are not readily available to users. Additionally, clients may not be aware of the restriction on transferring coins from the wallet back to the eToro trading platform.

Available Account Types

When it comes to account types with eToro in the U.S., the only options available are individual brokerage and options accounts. Unfortunately, joint accounts, retirement accounts, trust accounts, and custodial accounts are not supported on the platform. Additionally, eToro does not offer margin accounts, which may be a drawback for users with diverse financial goals.

The Bottom Line

eToro, a well-established online brokerage in the US, offers crypto trading services with a beginner-friendly interface. Features like CopyTrader and SmartPortfolios make it easy for newcomers to access the crypto market.

Apart from crypto trading, eToro also allows users to invest in stocks, ETFs, and options, offering a range of products. However, compared to some competitors, the variety of tradable assets is limited. Additionally, eToro lacks advanced trading tools, extensive research, and margin trading, making it less suitable for experienced traders wanting to use complex strategies.

eToro caters best to beginners and less experienced traders interested in trading popular cryptocurrencies and utilizing the platform’s copy trading feature. Advanced traders focusing on cryptocurrency trading may find popular crypto exchanges more suitable for their needs.

Compare The Finance Avenue to Similar Online Brokers

How to Purchase Bitcoin Using the eToro Application

Acquiring Bitcoin through eToro in the United States involves several steps. Initially, you must register for an account on eToro.com and undergo identity verification to complete the customer onboarding procedure. Subsequently, connect your bank card to your account for fund transfers, which will enable you to buy Bitcoin using the deposited funds on the eToro platform. The bought BTC will be stored in your eToro account, although you have the option to transfer it to eToro’s official crypto wallet known as eToro Wallet.

Is eToro Safe?

eToro, a licensed online brokerage firm, has a strong security reputation. In the U.S., its securities business, eToro USA Securities Inc., is a registered broker-dealer with the SEC and FINRA. Additionally, its cryptocurrency business, eToro USA LLC, is a registered Money Services Business (MSB) with FinCEN. Notably, eToro has not experienced any significant security breaches on its platform.

How We Selected the Top Online Brokers and Trading Platforms

Ensuring transparent and thorough evaluations of online brokers and trading platforms is a key focus at The Finance Avenue. Our methodology for the 2024 online broker awards involved a comprehensive approach that integrated industry research, expert knowledge, and feedback from investors. A detailed digital survey containing 110 questions was distributed to 26 companies included in our assessment framework. To validate the survey responses and gather any missing information, our dedicated team of researchers conducted additional online investigations and engaged directly with each company. The data-gathering process occurred from Feb. 19 to March 19, 2024.

We devised a unique model that assessed each company’s performance based on 11 key categories and 89 specific criteria to identify the best online brokers and trading platforms. The final star rating for each company was determined through a weighted calculation of the criteria within the various categories.

Furthermore, as part of our evaluation process for 2024, several companies under review conducted live demonstrations of their platforms and services through video conferencing. Moreover, our team of skilled writers and editors were granted access to real accounts by these companies to conduct hands-on testing and provide thorough assessments.

The Finance Avenue Broker Review Process

Through a comprehensive data collection and review process, The Finance Avenue offers an unbiased and thorough examination of the top online brokers and trading platforms.