As their official company statement says, eToro is a social trading and multi-asset brokerage organization that has offices in Cyprus, Australia, Israel and UK. Founded by two brothers – Yoni Assia and Ronen Assia, and business partner David Ring in 2006, eToro has successfully managed to pull a crowd that has made it worth a billion dollars network today.
The meaning of ‘social trading’ is that you automatically follow top-traders and gurus on eToro, and can copy the trades they are making, whether in stocks or currency. They also ventured into Bitcoin in early 2014, and launched a dedicated platform for crypto-assets trading as well. It might be beneficial if the trades strike the bulls-eye, but not all trades do that, so it is equally risky as well.
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This social review and market analysis of eToro will give you a better insight into this crypto-exchange, and will put you in a position to decide what’s best for yourself.
Based in Tel Aviv, Israel, eToro is currently launching a push into China and Russia for their full-time operations, and they are well-established in Israel, Cyprus, Australia and UK. They have their own dedicated wallet, in which they allow their users to store crypto-assets. Currently, they support Bitcoin, Litecoin, Bitcoin Cash, Ethereum, Dash, Ripple and Ethereum Classic. These 7 cryptocurrencies are up for trading on eToro’s platform.
Users often mistake eToro for an exchange from where they can buy or sell cryptocurrencies, while eToro is not an exchange. It is a trading platform that allows you to trade in these cryptocurrencies, and multiply your crypto-assets by paying no commission or trading fees.
The best part about eToro is that they do not charge any commission or fees on trades. They do charge transaction charges for the transactions that are registered on the blockchain, of course. The charges and fee structure varies from currency to currency, and also depends upon the order, whether it is a ‘buy order’ or a ‘sell order’. Their fees for Fiat currency exchange is different than for cryptocurrency exchange. For Bitcoin, they charge almost 0.001 BTC on sell orders, and a whooping 0.072 BTC on buy orders.
HOW IS eTORO UNIQUE?
The thing that makes eToro unique and different from other cryptocurrency exchanges is the availability of an expert guidance. The top-investors and their trading pattern can easily be tracked on eToro, something that is almost impossible to do on any other bitcoin exchange. Here, the charges might be higher than other exchanges, but the slippage is less. Slippage is the difference in the price on which you placed an order, versus the price on which the order got executed. Sometimes, investors tend to lose a lot of funds just in slippage, but on eToro, the slippage is really low.
It might be a popular option for stock market traders and investors, but one thing to notice about eToro is that it is not ASIC regulated, nor does it allow scalping for market makers. Despite this fact, eToro has support in over 170 countries, and has more than 5 million regular users.
ADVANTAGES OF eTORO
eToro has many upsides and advantages when we talk about cryptocurrency exchanges in general. There are many features that you will not find elsewhere, but only on eToro, and some of them are –
- eToro provides an access to all its users to follow or copy top-investors. While on other exchanges, the trading pattern of every individual is concealed and hidden, but eToro works differently. This feature might get you instant profits, if you play it carefully!
- This exchange is more popular for stocks and brokerage, than cryptocurrency. But with passage of time, it has developed itself into a dedicated platform for crypto-asset traders. With the options and features it provides, eToro quickly gained popularity in crypto-market as well.
- eToro does not charge any trading fees or commission on your trades. Every trade can be made for free, and the only way that they are earning profits, is through the difference in ask and bid amounts.
- The main motive of eToro is social trading, that is – making profits by knowledge sharing and contributing market insights to their platform. Other users can learn from top-investors and business gurus whose trades can be monitored and copied from their platform.
- Recently, eToro collaborated their two distinct platforms into one. Their WebTrader and Open-Book trading platforms are now a consolidated interface, where users can see all the information displayed on one screen.
SOME MORE UPSIDES
- They also have a practice account in which the user gets $100’000 for trading and practicing as virtual currency. This allows the user to learn before they can play with real money.
- They have a functioning mobile app for their website.
- eToro uses CySEC and FCA for due regulation of the brokers, they also have added SSL (secure socket layer) protection on their network to keep the confidential information safe and secure.
- They focus on a thorough and detailed account verification. From your personal details, phone number, email ID to your home address and government issued ID, eToro demands everything for your account to be verified and approved. Verification takes a few days, and the speed of verification majorly depends upon the traffic on the network.
- They allow deposits through multiple manners. Users can deposit funds to their trading accounts either from bank deposits, wire, credit card or debit card transfer, or even from PayPal.
DISADVANTAGES OF eTORO
There are many downsides of eToro that the users complain about every now and then. Some of the disadvantages are –
- eToro charges a high fees compared to other cryptocurrency exchanges. Where the rates of other exchanges vary from 0.1% to 0.25%, eToro charges
- Another thing that you must worry about is – overnight rollover fees. If you leave your trades open for a long time, overnight rollover fees might start adding up.
- You cannot open a live account for free. $50 are required to open a live account on eToro, and that is the minimum deposit that must be made.
- Despite being available and running in over 170 countries, eToro only supports and accepts USD as currency on their platform. This restricts users from other nations, as they have to pay currency conversion charges to continue.
- Withdrawals from eToro are not free. They charge $25 on withdrawals and it takes around five business days (sometimes even longer) to get the funds credited in your account.
- eToro has a limited customer support, and run only 24/5 (Monday to Friday). They have an option to live-chat, but are better available only through email and phone. Their email has a typical response time of 48 hours, and users often complain of not hearing from them quickly.
- The withdrawal also has a lower-limit. The minimum amount that you can withdraw is $50.
REGULATION AND REACH
eToro might not be regulated by ASIC, but it is registered under CIF (Cypriot Investment Firm), is regulated by CySEC (Cyprus Securities and Exchange Commission, Europe) and FCA (Financial Conduct Authority) in Europe. It is running in 170 countries with full legal authority but it has some compliance issues in USA which is why it is not available there.
They allow their users to enable 2FA (two factor authentication) on their devices to add an extra layer of security to their trading accounts. They have SSL (secure socket layer) encryption and every piece of confidential information that you choose to share on eToro is kept secure by them.
Market positioning of eToro is solid, compared to many other cryptocurrency exchanges. It might not be a crypto-exchange, but the fact that it allows trading in crypto-assets, makes it worth a discussion. The total number of views that eToro managed to pull in last 6 months was an impressive number of over 30 million.
While their maximum traffic influx comes from UK (13.5%), followed by other countries like – Germany (9.4%), France (7.7%), Italy (5.6%) and Spain (3.9%).
Social media influences a lot, when it comes to determining the online presence of a website. With eToro, the influence directly comes from major social media, and the top one being YouTube that manages to pull over 43% of traffic. It is followed by Facebook (37.5%), WhatsApp Web (8.5%), Twitter (3.3%) and Reddit (1.6%).
eTORO SIGNING UP AND SECURITY FEATURES
Signing up on eToro is fairly simple. The user just needs to upload his personal details and phone number. He may then get the trading account verified from the code or link sent to his email. After verification, users can either choose to make a practice account. The practice account has $100’000 worth of virtual money given by eToro. This practice account cannot be used to withdraw any funds, since it is completely virtual.
However, you can choose to skip the practice account and make a live account directly. To start with a live account, you will first need to add your bank account details. After which you will need to deposit $50 minimum to start trading. For verified accounts they do not have any maximum deposit limit, while for unverified accounts, the limit is $2250. Unverified accounts can easily deposit funds, but they cannot withdraw them to their bank accounts. To withdraw to your bank account, your profile must be verified.
To verify your account, you will need to provide a legal government issued ID, phone number and house address proof. The government issued ID can be any, ranging from – driver’s licence, passport etc. Basically, anything that contains your full name, photograph, date of expiry and date of birth. While the phone number verification requires you to type the SMS you receive on your registered mobile number. Further, there is a list of the address proofs that you can submit. But they shouldn’t be older than six months. It includes – bank statement, credit card statement, electricity bill, tax bill etc. However, receipts, invoices of purchase and hand-written bills are unacceptable.
Verification takes typically 3 to 5 working days. Rest it depends upon the traffic on the website.
CRYPTOCURRENCIES SUPPORTED BY eTORO
eToro supports seven major cryptocurrencies namely – Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BTC), Ethereum Classic (ETC), Ripple (XRP), Dash (DASH) and Litecoin (LTC). You cannot buy these currencies on eToro but you can only trade in them. For trading, you will need to possess this currencies already. Hence, you first need to buy these currencies and then load them up in your trading account from existing cryptocurrency exchanges.
TRADING FEATURES OF eTORO
eToro is famous for its trading features. They allow users to follow and copy trades of top-traders, and investors. eToro believes in social trading, which means everyone can benefit by studying patterns of famous traders.
This idea allows users to track trading patterns of big investors, using which they can make their own trades. It can be extremely dangerous as well, as it may end up causing unnecessary FUD (fear, uncertainty and doubt), if all users follow wrong trade of a big trader.
eToro also allows its users to seek assistance from trading gurus. These gurus are given commission by the website for their insights and contribution.
FEE STRUCTURE OF eTORO
The fee structure of eToro varies greatly. Unlike other cryptocurrencies, eToro does not charge any trading fees. Hence, the only way it profits is from the gap between ask and bid (spreads). The spreads on eToro are usually very large, which makes it tough for small-time day-traders to get out with good profit. To make good profits, your trading amount has to be large (high volume of crypto-assets).
For Bitcoin, eToro charges 0.7% fees, which is too high compared to Binance (0.1%), and even GDAX (0.25%). Moreover, it charges a flat fees of $25 on every withdrawal, and the minimum withdrawal has to be $50.
CUSTOMER SUPPORT OF eTORO
Customer Support of eToro is not as reliable as it should be. They are available only 24/5 (Monday to Friday) instead of 24/7, and they do not reply on live chat or phone as actively as they should. They do have support through e-mail though, and they reply typically within a couple of days. The customer support still has a lot of room for improvement.
eToro cannot be called a crypcotucurrency exchange or a wallet per-se, but it is surely an amazing trading platform. Considering the features they provide, they are better than many, but surely not the best if we also consider the high fees. Hence, with this review of eToro we hope that you understood the basic functioning of the website. Now, you will be in a better position to decide what is best for you.