In this review, we’re going to examine whether your funds are safe on eToro’s cryptocurrency trading platform. The answer is an emphatic yes, given the regulated nature of this exchange.
eToro dubs itself a “social trading network.” It offers Copy Trading to investors (where you mimic the transactions of a more experienced trader or let other investors copy you) and supports trading contract for difference (CFD) contracts.
They’ve been around since 2007, though they only began supporting cryptocurrencies for traders in 2017. eToro boasts millions of users across more than 100 countries.
eToro Europe and eToro UK are regulated businesses with a multi-step identity verification process in place including two-factor authentication (2FA). There are no known public hacks to speak of, though in some cases, users have had stalled withdrawals, which appears to be tied to not having gone through the proper identification verification process.
Fun fact: Vitalik Buterin seemingly has been involved with eToro. Catch this video of him at the eToro headquarters from 2017 –
eToro started supported cryptocurrencies in August 2017, just as bitcoin and the altcoins were starting to gain momentum. They also support stocks, foreign exchange, etc. As of April 2018, eToro appears to support bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Dash, Ripple, Stellar and NEO.
eToro says it “pioneered bitcoin trading in 2013 via CFDs” before launching the trading capabilities to the markets several years later. They’ve since launched CFDs for cryptocurrencies, which lets traders take a buy or sell position in a coin depending on whether you think the price will rise (buy) or fall (sell).
You just need to have your account funded with the minimum amount first (minimums are discussed in more detail below.) When you close out a position, the remaining funds are transferred back to your account.
With the CFD, you’re not actually purchasing the digital asset, but you’re still able to trade on it to capitalize on price movements. It reduces the need for a digital wallet, but eToro is in the process of developing one to make cryptocurrency trading easier for its users. You can learn more about CFD trading capabilities here.
The eToro trading platform is comprised of leaders and followers. It gives you the opportunity not only to automatically copy the investment portfolio of successful traders on the platform but also to generate revenue by sharing your own investment strategies.
For the novice investor, you can learn about the strategies of experienced traders and the types of assets they trade. If they meet your risk/reward profile, you can copy them. View features such as where they’re located and their investment portfolio performance over a given period. The experienced traders will offer suggestions, such as copy me with at least USD 500 in your account, that make it easy.
For the experience trader, share a glimpse into your investment portfolio and strategies with beginners and generate a revenue stream from it.
The website is available in 16 languages. Unfortunately, the trading platform isn’t available to US and Canadian investors, but they are open to more than 100 countries.
You can also get to know the CEO Yoni Assia in this video, where he introduced CopyTrader.
ADVANTAGES OF eTORO
There are many positives when looking to trade cryptocurrencies through eToro –
- No known hacks.
- Supports bitcoin and several altcoins
- Trade BTC in real time.
- Trade order options
- Clients are still able to open short (SELL) positions on the platform, however these will be CFD positions.”
- They are regulated, which means they have strict security measures in place surrounding identity verification to protect investors.
- Available in 140 countries across Europe, Asia, Central Africa, the Mideast and Latin America.
- Access to experienced traders and their investment strategies as well as their performance. You can interact with them on the eToro forum.
- Designed for novice investors and experienced traders
- They say “quick and easy” deposits
- Mobile app for both iOS and Android
- eToro is a licensed trading platform
- With CFDs, you don’t have to purchase the underlying cryptocurrency asset. As a result, transactions are faster and accessible around the clock, including weekends and holidays.
DISADVANTAGES OF eTORO
- The site periodically suffers delays, which the company typically addresses on social media forums including Telegram.
- You can’t make withdrawals in cryptocurrencies and must first convert the funds to fiat money. The good news is eToro plans a digital wallet in 2018 that will allow users to make withdrawals in crypto.
- As of year-end 2017, they stopped allowing edits on stop losses for cryptocurrencies.
- Not available in US or Canadian territories
- Identity verification takes several days.
- A flat USD 25 withdrawal fee
- Withdrawals take several days and, in some cases, can be delayed further, usually if the withdrawal is attempted before the identity verification process is complete.
- Until they have the digital wallet out of beta, users who want to withdraw must close their position and convert to fiat, as per a Reddit post.
- No cryptocurrency pairs.
- No leverage available on cryptocurrencies and eToro says there won’t be any time soon. eToro CEO Yoni Assia explained the exchange’s approach on leverage: “We actually buy for our clients the actual asset and hold the currency on their behalf. With the volatility in the cryptocurrency market, leverage is actually too dangerous for people to use. Since we believe in cryptocurrency in the long term, we actually would like to see our users hold it for the long term. Therefore, no leverage trading is the right approach when it comes to this asset class.
eToro doesn’t charge trading fees per say, but they charge fees tied to the spread as well as overnight fees. They urge traders to get to know the relevant market hours, which for cryptocurrencies are 24/7. You’re not charged a fee when you open a position in a cryptocurrency.
· Minimum withdrawal = USD 50
· Withdrawals have a USD 25 flat fee attached
· Minimum deposit = between USD 200 and USD 500 (In Israel, the minimum deposit is USD 10,000.) To learn what your minimum requirement is, select “deposit funds” and the amount will automatically appear in the box. If you haven’t verified your account, your minimum deposit amount balloons to USD 2,250. Corporate account minimum deposit is USD 10,000.
“Fees only apply when shorting cryptocurrencies or to users who are still holding leveraged BTC or Ethereum positions. Overnight fees/credits are subject to change,” as per the eToro website.
Also consider these account limits (the minimum deposit amounts conflict with the above minimums, both of which were provided by the eToro website) –
Here’s a breakdown of their fees and you can also access the table via this link –
eToro is quite versatile with the type of payments it accepts compared with other bitcoin exchanges. They accept the following payment methods –
· Wire transfer
· E-wallet (PayPal, Skrill, Neteller, Webmoney)
· Mobile app
Right off the bat it’s good to know that eToro is a regulated exchange. eToro Europe is “a registered Cypriot Investment Firm (CIF).” Meanwhile, eToro UK is registered with the Financial Conduct Authority (FCA). Both businesses are compliant with MiFID. They support anti-money laundering standards, which the company explained to one mobile app user that they are required to “send out funds the way [they] receive them” rather than with an alternative method.
eToro’s Yoni Assia offered his take on exchange security, pointing to the company’s ”500 employees worldwide” including “developers, IT experts and security experts.” He also noted that they’ve been in the space longer than most, given their history with the bitcoin CFDs.
Many eToro customers “want to safe keep their cryptocurrency on their own,” Assia said, adding that it “makes sense to some more sophisticated clients that understand how to keep their cryptocurrency safe and how to manage it.” The exchange can do this for you.
As of 2017, eToro’s blockchain wallet was in beta form. The wallet is designed for investors to store and trade multiple cryptocurrencies from the same wallet.
To begin the sign-up process on eToro, you’ll have to provide some basic information ahead of the identity verification process. New users can also sign up using Facebook or Google. Here’s a screen shot of the first step in the sign-up process –
In order to complete the sign-up process on eToro, identity verification is required. If you don’t properly complete these steps, you will face account limitations surrounding trades and withdrawals and your account could be closed. You’ll need the following documents to perform ID verification –
· Government issued ID. They prefer a passport, but it could also be a driver’s license.
· Phone number verification via SMS.
· Proof of address (bank statement, credit card statement, utility bill, letter from employer). You can send the documents in your native language and upload them on the site.
Expect the verification process to take several days. They’ll let you know once you’re verified, or you can follow the status on eToro trading platform. You’ll know that your account’s been verified when you see a “green tick” alongside your username.
The trading dashboard has a watchlist option that lets you monitor not only cryptocurrencies but also equities or indices if you’d like.
You’ll notice a “sell” button on the trading dashboard. Sell is translated as “short,” and a similar strategy applies to shorting a stock. For instance, if you believe the Ethereum price will fall, you can open up a sell position and close it out later for a profit (or loss, if that’s the case.)
When you’re ready to trade, enter the amount you’d like to trade in the “amount” field. You will notice there are multiple features to help you control exactly how much risk you want to take.
· Take profit on the trade – this feature lets you set the parameters of when you want to exit a trade. You can set it as a price or as a profit amount.
· Stop loss – this feature is for when you are losing money. It determines at which point you say enough is enough and leave the trade.
· Trailing stop loss – this tool follows the price when it moves in your favor.
· Open up the trade and share it on the network.
· Move the trade to your portfolio, and it will appear.
· To close the trade, click the red “close trade” button.
eToro has several API’s, including the following –
eToro also has a mobile app that’s available on both iOS and Android platforms.
The Android app on Google Play has received 4 stars out of a possible 5 stars. eToro responds to reviews and helps users to sort out some technical issues, such as needing to update to the latest version of the app. Some of the negative reviews involve policy issues such as the USD 200 minimum investment. Users seem happy with the overall navigation and performance of the app but also point to issues such as wide spreads in the prices.
eToro’s iOS app has an average of 4.5 stars out of a possible 5 stars. Users find it “intuitive” and “easy to trade.” The app supports family sharing, so up to six people can use it with that feature activated.
eToro just extended cryptocurrency trading to the public in 2017, and many of the reviews are of potential users of the site who are looking to learn the basics about the exchange before diving in. Perhaps the most egregious review is from a user who claims to have lost thousands of dollars on the site, though eToro suggests there may have been a violation of the terms and conditions, based on the content this user has provided.
Overall, eToro is a trendy site that takes a different tack than most cryptocurrency exchanges. The fact that it’s a regulated exchange is a huge plus for security, and they haven’t experienced any major security breaches. They have a history of trading FX and that is something that many crypto-only exchanges can’t provide.
If you’re looking for a model portfolio to emulate, you won’t be able to find that option at most other companies. There are drawbacks, such as the flat withdrawal fees and some trading restrictions (e.g., no leverage.) But that’s not uncommon for just about any bitcoin trading platform.
To reach eToro support, you must submit a ticket online.