EToro Review Guide: Pros and Cons

It is vital to grow your wealth through a variety of different investment methods. EToro, a social trading platform for cryptocurrencies and other assets, allows people worldwide to increase their net worth with their trading platform. EToro’s intuitive interface, the diverse array of cryptocurrency options, and the CopyTrading function enable investors of all skill levels can get the most out of the platform.

In this article, we provide you with a full eToro review about its capabilities to users worldwide. We outline the pros and cons, how to use the trading platform, the costs, and the various features. This review about eToro should provide you with the necessary information to make a sound decision on whether to create investor accounts or not.

 

What is eToro, and what services does it offer?

EToro is a social trading broker that serves over a million clients in 140 countries. The platform primarily focuses on social trading and various asset subgroups, including cryptocurrencies.

Founded in 2007, the company initially services a graphics-based forex trading platform. EToro enables U.S. customers to trade cryptocurrencies, while Non-U.S. clients can trade other asset classes (contracts for difference, stocks on varying exchanges).

Three main entities regulate eToro throughout the world. The Financial Conduct Authority (FCA) regulates the trading platform in the United Kingdom. In Australia, the Australian Securities and Investment Commission monitors that entity. All other worldwide clients enjoy the platform controlled by the CySEC (Cyprus Securities and Exchange Commission).

 

Who Benefits from eToro the most?

EToro utilizes a graphic-focused trading platform for U.S. cryptocurrency traders. One of eToro’s top benefits is the ease of use with its copy trading capabilities. A client’s interface allows them to study the moves of eToro’s most successful traders. Then, users can execute trades in real-time, automatically. Later this year, the company plans to launch equity trading functions for its U.S. clients.

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How to Use eToro

It is a simple and straightforward process to open a new eToro account. After you fill out the required online information, eToro investor accounts take 1-4 days for identity verification and account access. It costs $50 for U.S. and Australian residents to open an account, while it is $200 for all other countries. You can fund the account with a credit card, PayPal, Neteller, Rapid Transfer, Sofort, Skrill, and iDEAL.

To place a trade, all you need to do is select the trade button while viewing the coin on the watchlist. There is also a main buy button within your portfolio listing. If you want to sell an individual coin, click the dropdown arrow, and click sell from the list. If you purchase a position in different lots, then you may close up to the entire position. You cannot close out a position in a single lot, however.

If you trade outside the United States, click on the markets button to view the available asset classes. This collection will include over 1700 equities, 20 CFDs (contracts for difference), and 47 currency pairs. The users may customize and share their waitlists with the mobile app. Cryptocurrency trading on mobile is comparable to the web entry experience, besides a few extra capabilities.

 

The Cost of Using eToro

Depending on your location and types of assets traded, fees with eToro will vary. Cryptocurrency trading U.S. clients typically pay anywhere between 0.75% and 5.0%. This fee is part of the execution price and not billed separately for the account user.

The non-U.S. users who trade stocks will not pay commission for opening and closing long positions. However, if they execute short sales, they will pay a commission fee of 0.18% of the trade value.

EToro UK users (or any non-U.S. customers) who buy assets that are not in their home currency will pay a fee for currency conversion. There are also financial penalties for people who do not use their current account. EToro enforces a $10 fine per year for accounts with no activity.

Regarding withdrawal fees, there are none for U.S. customers who take out at least $30. Outside the U.S. there is a withdrawal fee of $5.

 

Self-Education Opportunities within the Trading Platform

The tools for education are not as plentiful for U.S. users. If you navigate to the help section to the left, you will arrive at a page of six topics. There is some interesting information within the complete fintech guide, including insights on eToro’s CopyTrader portfolios.

The education opportunities for users outside the U.S. are much more comprehensive. These customers have access to weekly webinars that provide education on financial services, copy trading, stock and currency trading, and cryptocurrency trading.

 

Portfolio and Analytical Reports

It is useful to know how your portfolio performs and the number of fees you pay in each period. At any given time, you may request to see your portfolio reports, which lists your assets or displays a pie chart showcasing your current portfolio.

To find the fee report, select the portfolio tab, go to history, hover over the gear icon in the top right, and then you may choose the option to download the account statement. The full PDF shows your cash flows with fees included. If you are using CopyTrading and following an individual, the report will list all their trades separately.

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Customer Service

Accounts that operate under $5000 may access help online or via trouble tickets. eToro’s customer service team includes a live agent that you may access on the chat service. EToro accounts that hold at least $25,000 advance to a higher level of eToro’s Club. These users receive an assigned account manager that dedicates time to make sure the account runs smoothly.

One disadvantage of eToro’s customer support system is that there is no phone support available (except Australia). Although there is an online chat available for users on the service page, no live broker supports exist.

 

What We Like

Wide Variety of Cryptocurrency Options

EToro’s trading platform offers 15 different cryptocurrencies for customers, which are available for trade 24/7. Some of these more notable names include Bitcoin Ethereum, Ripple, Tron, Iota, Tezos, and eos. The platform offers security features that protect your investments in these areas. If you wish to practice trading in the platform, eToro provides a virtual portfolio of $100,000 to test your strategy.

 

Intuitive Interface

The eToro mobile app and website each provide a user-friendly interface for all customers. Both the website and mobile application are consistent in format. Users can manage and organize cryptos on one screen with a simple interface. The user panel on the left side features option buttons for watchlist, portfolio, a news feed, trade markets, and copy people (for copy trading).

EToro’s one-click trading capability is another key feature of the trading platform. EToro recognizes that a lot of its clients repeat trading positions. When customers open a new position, the eToro platform sets up a single-click option with curated parameters. Other excellent interface features include:

  • Tip Ranks Research Tab – provides insights from lead analysts in one communal place
  • Take Profit – users can adjust predetermined price points to close an open position
  • Stop Loss – users can set price points to sell a position if it reaches a given loss
  • Procharts – analysis tool that allows users to compare charts for various financial instruments
  • Offline Trading – even when the trading platform is down for maintenance, users may place trades at any time during the night or week

 

Social Trading and CopyTrader

Many new cryptocurrency traders might feel alone when trading online. EToro solves the issue by instilling a community of investors and traders. The trading platform doubles as a social network who engage, discuss ideas and theories and share trading strategies and decisions on the social news feed.

CopyTrader is one of eToro’s most popular features. This technology enables users to view the actions of top traders in real-time. The benefit of the technology is that it copies the trades and updates your portfolio automatically. Although this feature does not guarantee gains, it is a helpful tool for beginner traders.

 

What We Don’t Like 

Wide Spreads

Luckily, there are not any commissions charged on trades. The individual spreads are inconsistent, however. The individual spreads vary between the different coins, and some of them are too wide. The tighter Bitcoins sometimes run 0.75%, and the wider Tezos are 5%. For newer users, this volatility can make investing unpredictable and somewhat challenging.

 

Minimum Purchase Price

Everyone has a budget to abide by eToro. One disadvantage of the platform is users must purchase any cryptocurrency for at least $25. Smaller accounts may want to spread the initial investment over multiple coin types, and this limitation would prevent that.

 

Higher Minimums for Copy Trading

The CopyTrader function of eToro is a useful investment tool in many ways. You can monitor the leading traders’ transactions and automatically place trades in alignment with the experts. These copy trades do require a minimum balance of $200, however.

 

Risk in Losing Money When Trading CFDs

eToro is a versatile trade investment platform where you can trade many assets, including crypto assets stocks, and CFD assets. There is a high risk that accounts lose money when trading CFDs, however. CFDs are complicated financial instruments that experience high leverage, which can expose investors to losing their money. Before trading CFDs, the customer needs to do research and make sure they are ready.

 

FAQs

Investing in eToro is a big decision that requires careful thought. Below are some of the most frequently asked questions among future and current eToro users.

 

How does eToro make its money?

EToro earns its money through its full trading and investment services online and through a variety of fees that its customers pay. EToro does not make its financial statement available to the public, but there may be a few other ways for the company to profit.

Spreads are a likely revenue generator for eToro. Spread represents the gap between the price you pay for the sell trade, and what the broker buys or sells it. For example, if a stock costs $100 at its market price, eToro will charge $100.01 and make a difference of $0.1.

Another possible way that eToro makes money is through its overnight fee. eToro enables its users to leverage trades and loans. Users can pay for 10% of a stock, while the platform lends the other 90%. The trading platform will then charge you interest for this loan. Additional non-trading fees that eToro charges include withdrawal fees and conversion fees.

 

Are profits from eToro taxable?

If you earn profits while trading on eToro, these may be subject to various taxation regulations and laws. It will always depend on your country of residents. To confirm further information about eToro’s tax policy and what it means for you, contact your nearby tax authority.

 

Can I trust eToro? 

eToro and its operations are regulated by Australis’s ASIC, U.K.’s FCA, and Cyprus’ CySEC. While eToro is not listed on any stock exchanges and does not publish financial information, they are held accountable by these organizations. We wish that it were a more transparent broker, but we know it is not a scam.

 

Wrap-Up

In this EToro review, we discussed how it is an excellent social trading platform that provides beginner cryptocurrency investors an attractive, user-friendly experience. Although the research data and transparency are light and could be improved, you can learn from others. The social network aspect of the program allows users to share information, follow others’ behaviors, and share critical insights that help others navigate the cryptocurrency world.

We also appreciate the CopyTrader function of the platform. The new cryptocurrency traders arrive on the scene with confidence by following the best traders’ footsteps.

Users in the United States have a different experience than non-U.S. customers, who have extra asset classes and access to stocks in more countries. EToro’s ability to transfer your crypto value to an external wallet is a unique feature worth noting. For people who may want to use Bitcoin positions for other uses than trading, this could be a handy platform.

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