Founded in 2007, broker eToro has more than 13 million users in 140 countries worldwide — and the U.S. is now on that list.
The broker made its name through its social investing platform, an innovative tool that allows users to copy the trades of other investors.
While eToro runs multi-asset brokerages (offering stocks, commodities and forex trading) in other countries, so far U.S. customers can trade only cryptocurrencies on the platform. The company plans to expand its U.S. offerings in the future.
eToro is registered in Cyprus, is a regulated Financial Conduct Authority in the U.K. and retains a cross-border license to operate in other European countries, credentials that may give U.S. users comfort in using a brokerage not currently licensed by the U.S. Securities and Exchange Commission. However, it is important to remember the Securities Investor Protection Corporation, or SIPC does not insure cryptocurrency brokerages.
EToro is best for:
Cryptocurrency traders.
Social or copy trading.
eToro features
Social trading: EToro’s CopyTrader allows you to copy and trade automatically based on the moves of other traders. How it works: You choose an investor you want to copy, and with a click of a button, you can begin mirroring their positions automatically (with the option of a stop-loss level to limit potential losses).
The minimum amount to copy a user is $200, and the maximum amount is $500,000. Users can copy up to 100 traders simultaneously. Even without using CopyTrader, users can view millions of other traders’ portfolios, stats and risk scores. (While they have full access to all public profiles worldwide, U.S. clients can copy only other U.S. users).
Cryptocurrencies offered: Currently, eToro has a selection of 18 cryptocurrencies for U.S. customers to trade. Many brokerages that offer crypto access — such as TradeStation and Robinhood — offer less. However, crypto exchanges such as Coinbase and Binance.US offer 50-plus cryptocurrencies for trade.
EToro clients can currently trade these cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, XRP, Litecoin, Dash, Stellar Lumens, NEO, EOS, Cardano, IOTA, Zcash, TRON, Tezos, Dogecoin, Uniswap and Chainlink.
Crypto trading costs: EToro charges its trading fees through spreads that may rise and fall with market conditions. Unlike some other providers, eToro charges round-turn — one spread for both buying and selling crypto assets. Spreads ranged from 0.75% for Bitcoin trades to 5% for trading Tezos. Most cryptocurrency spreads range between 1.9% and 2.9%. (Check eToro’s site for current pricing.)
By comparison, SoFi charges a markup of up to 1.25% on crypto transactions, TradeStation charges 1% on trades for customers with balances up to $100,000 (with a limited introductory offer of 0.5%) and Robinhood charges no fees for trades.
Digital wallet: EToro provides a free digital wallet to store cryptocurrency, known as eToro wallet, available in iOS and Android. The cost to convert crypto into fiat currency (which is to say, U.S. dollars) and vice versa is 5%, which some users may find a costly bite into any potential profits. The minimum transaction is $125 and the maximum is $10,000.
Users can transfer cryptocurrency from the eToro platform to their own digital wallet, but eToro notes coin transfers are one-way — which means any coins transferred cannot be transferred back to the eToro trading platform.
Cryptocurrency trading available in 43 states: While all U.S. residents can, sign up for a free eToro account for virtual trading, eToro is currently unavailable for actual cryptocurrency trading for residents in these states: Delaware, Hawaii, Minnesota, Nevada, New Hampshire, New York and Tennessee.
For cryptocurrency investors who want to mirror the moves of serious crypto traders, eToro’s social trading platform is an attractive offer. With 18 cryptocurrencies to buy and trade, eToro has a greater selection than some other U.S. crypto brokerages.
Still, it is important to remember that investing in cryptocurrencies like Bitcoin is highly speculative and known for its volatility.
Pros
Offers access to 15 cryptocurrencies.
Low minimum to fund an account and begin investing.
Social trading: Ability to match moves of popular traders.
Cons
Service only available in 41 U.S. states.
While eToro has forex and equity trading available in other countries, U.S. eToro customers are limited to crypto trades.
Users on eToro are allowed to begin trading cryptocurrency for as little as $50, and its innovative trading platform lets investors mirror select traders with successful track records, move-by-move. However, consider the risks inherent in trading these highly speculative assets.
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