eToro Review – A Crypto Social Investing Network

If you are investing or thinking of investing, you have no doubt been hearing much about cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and even Dogecoin. These alternative currencies are digital assets growing in popularity yet not always available on traditional stock trading platforms. For example, online brokers like E*TRADE don’t offer the ability to buy and sell crypto. To get into the cryptocurrency trading arena, you’ll need one of the newer platforms specifically designed to help you explore this brave new world.
One such environment is eToro, which offers 16 of the world’s most popular crypto coins. Here, we take a closer look at the company in our eToro review.

What is eToro?

eToro, based in Israel but with a U.S. headquarters in Hoboken, New Jersey, was established in 2006 and operates in the United Kingdom, Australia, and Cyprus, along with the U.S. and its home country. Currently operating as a crypto-only platform – although it says stocks are coming soon – eToro USA is a place for crypto traders to keep up to date on the ever-changing (by second!) crypto world.

How does eToro work?

Signing up for an eToro trading account is simple and free – it's a completely user-friendly platform.
Begin by entering your name and email or connecting via your Facebook app.
Once you have confirmed your email address, you are brought back to the site to complete your profile.
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Add your basic details, location and SSN. Then pick your level of investing experience.
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Next, establish your goals.
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Then how long you plan to invest.
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Then select your risk tolerance.
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You’ll go through the series of questions asking if you are related to anyone who could provide insider trading secrets, your income and employment, and then your phone number. You’ll be texted a code to confirm it is you.
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Next, you accept that you are aware of W9 for any earnings and that’s it. You are ready to deposit from your bank account (or credit card or PayPal account) and start investing.
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Of course, the platform offers a mobile app for Android and iOS users.

How much does eToro cost?

eToro promotes itself as being free – no deposit or withdrawal fees are charged. (A minimum deposit of $50 is required.) However, trades of crypto begin at $25 per trade, which is a pretty hefty price tag when other platforms are truly free.

eToro features

17 cryptocurrencies

eToro offers Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ethereum Classic (ETC), Litecoin (LTC), Dash (DASH), NEO (NEO), EOS (EOS), Stellar Lumens (XLM), Cardano (ADA), Tezos (XTZ), TRON (TRX), IOTA (MIOTA), Zcash (ZEC), Chainlink (LINK) and Uniswap (UNI). It just added Dogecoin (DOGE) in May 2021 due to high demand of the meme stock.
You can enroll in an eToro account from any state, although only 42 states at the present as able to trade and deposit using it. The company says it is continuing to roll out across the country.

Fractional assets

With Bitcoin at over $50k, you may think it’s too late to take ownership and invest in this finite coin, which is the largest of the cryptocurrencies. Not so with eToro. Fractional trades for $1 are available so you can buy into fractions of Bitcoin as you can afford it. However, eToro charges a $25 per-trade fee.

Digital assets

Like many platforms that allow you to buy and trade crypto, eToro provides crypto assets through its automated system but you do not have it in your digital wallet for storage. To have your assets directly, you have to transfer them to eToro Money wallet to use for payments. It’s the wave of many crypto platforms but serious investors wanting to keep their digital assets on their own wallets will not like this feature.
Your funds at eToro are FDIC-insured up to $250,000.
You can also use your debit card to buy Bitcoin, again where it is stored with eToro.

A practice portfolio

For those nervous about entering the volatile crypto market, eToro provides a $100k virtual portfolio for eToro users as a demo account to practice your strategy before investing real money.

Copy trading

You can also follow along with eToro’s top crypto traders with its CopyTrader technology. By choosing a trader you want to follow, click Copy, set your amount, and then whenever they trade, eToro trades for you too.
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You can see actual people where you can click on their past performance for examples to determine if you’d like to copy them as these make real-time trades in popular cryptocurrencies.
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It is this feature that makes eToro known for being a Social Investment Network.
eToro touts this copyportfolio as getting to work with top traders without the management fees but it isn’t a free program. The traders you follow get paid and you pay based on a spread – no commissions go to eToro. Example spreads currently have Bitcoin at 0.75% as the lowest spread to 5% spread to follow a Tezos top trader.

Who is eToro best for?

eToro is best for – and geared at – new crypto investors. Your top traders won’t be Elon Musk and Mark Cuban, but you will find a place with plenty of opportunities to learn about cryptocurrency and practice until you are ready to start investing.

Who shouldn’t use eToro?

When it comes to entering the world of crypto, it’s not just as simple as using a brokerage. You have to use one that deals in cryptocurrency and even then, preferably one that gives you the keys to your crypto. Some platforms merely allow you to trade cryptocurrencies and, hopefully, make some money. These keep your keys “for you,” which means you don’t have the crypto in your wallet. This is akin to trading in Gold but not having bars of Gold at home.

Pros & cons

Pros
  • Crypto platform. Trading for 16 different cryptocurrencies.
  • Educational. With easy-to-use areas of the eToro platform, you can learn more about crypto, practice with a portfolio, and copy those already making good headway.
  • No hidden fees. The platform is upfront about any fees it will charge you so there are no surprises. It’s free to sign up.
Cons
  • No keys. You will not receive the keys to your crypto purchases. Instead, it is stored in an eToro wallet and if you want the funds, you get it in cash and not a digital asset.
  • Not available in all states. There are currently 8 states unable to use eToro.
  • No ETFs. Yet. The platform is 100% crypto trading as of early May 2021.

eToro vs. competitors

Robinhood

Offering crypto and fractional shares, Robinhood is a favorite to younger and new investors, gaining popularity for its involvement as a go-to for meme stocks. Robinhood is free to enroll and doesn’t have account minimums. It does charge you $5 per month and fees for orders but in its pricing structure, these never surpass $5.95.
However, Robinhood only offers seven crypto coins: Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin.

Coinbase

A popular investor crypto exchange in the U.S., Coinbase has 50 altcoins available. Even better is that you can stake your coins and keep them on your wallet, whether that is one hosted by Coinbase or a non-custodial wallet. It, too, provides fractional shares and it is free to enroll. Then again, it also has some of the highest fees, charging trading fees of 0.50% for purchases and sales of crypto.
Coinbase has two account types: its introductory platform and Coinbase Pro. This account allows for stop orders, limit orders, and more features.
It is good to note that Coinbase critics do not like how it tracks cryptocurrency use.

FAQs

I see friends claiming big returns on crypto. Should I invest?
As with all investments, there are risks but crypto is extremely volatile. Don’t risk more than you are willing to lose.
Should I utilize a platform that provides me with private keys to my crypto?
If you are planning on investing in crypto – and not a ton – you may not care about having the keys to your assets. However, if you are going big on holding Bitcoin, for example, you’ll want private keys and your hard wallet to keep your assets safe.

The bottom line

eToro is an easy-to-use platform geared toward beginners who want to begin trading cryptocurrencies. Its offerings include some of the major coins and its fees can stay low if you’re interested in dipping a toe into cryptocurrency. But if you are thinking of making this a long-term investment, do yourself a favor and turn to a platform that gives you full control of your assets and doesn’t force you to exchange them for cash.

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