Crypto

eToro Review 2021

Written by CHANEL G.

eToro’s easy-to-use copy trading platform allows traders to copy trades made by investors in over 2300 instruments. This includes forex, CFDs and popular cryptocurrencies.

The Top Takeaways of 2021

These are our top eToro findings:

  1. eToro was established in 2007 and is regulated by two tier-1 and one tier-2 jurisdictions. This makes it a safe broker (low risk) for trading forex or CFDs.
  2. eToro excels in social trading as well as cryptocurrency trading. It is our top choice for both these categories in 2021. eToro also offers a mobile app and a web platform that are easy to use, which is great for novice investors like beginners.
  3. Despite introducing zero-dollar commissions in the US and cutting spreads for forex trading, eToro is slightly more expensive than its competitors. eToro has a limited number of traditional research tools and materials compared to its competitors.

68% lose money on retail CFD accounts.

Is eToro Safe?

eToro has a Trust Score of 92/99 and is low-risk. eToro has been authorized by two tier-1 regulators, one tier-2 regulator (average confidence), and one tier-3 regulatory (low trust). Australian Securities & Exchange Commission and Financial Conduct Authority have authorized eToro. Find out more about Trust Score.

Offering Investments

eToro has a total number of 2361 tradeable symbol. Below is a table that summarizes the various investment products available for eToro clients.

Usability eToro is a multi-asset broker and goes above and beyond to make traders’ lives easier. eToro allows traders to choose between CFDs and trading the underlying asset from their trade-ticket window. It is subtle, but it is very useful.

Cryptocurrency – Cryptocurrency trading can be done through CFDs or by trading the underlying asset (e.g. Buy Bitcoin. Not all Crypto CFDs are available to retail traders, UK resident or brokers. Moreover, cryptocurrency trading at eToro cannot be done in Russia, The Netherlands and France (including French Territories).

Commissions and Fees

eToro, a market-maker broker, lists a typical variable spread at 1 pip on EUR/USD. This is slightly more than the industry average. Retail traders choose eToro not for its spreads but for its social copy-trading platform capabilities. (See Platform and Tools section below).

VIP accounts: eToro offers a VIP Club membership with five tiers, ranging from diamond to silver, for traders who have balances between $5k and $250k. Benefits vary depending on the level. These include access to exclusive assets and a dedicated account manager, discounted withdrawal and deposit fees and access to private signals.

Popular Investor Program: EToro’s Popular Investor Program has four levels, from cadet to senior, where you can receive a variety of perks. This program offers benefits such as spread rebates, monthly payments, and even management fees for elite status. Popular Investor is for traders that allow others to copy their strategies.

Cryptocurrency trading Overall, eToro’s pricing is close to the industry standard for trading physical cryptocurrency. For example, eToro charges 0.75% to buy or sell bitcoin. However, its fiat-to-crypto conversion fee of 5% is very high. Moreover, converting crypto to crypto at eToro costs only 0.1% plus the spreads. eToro has the largest selection of crypto assets, both CFDs as well as the underlying. We are confident that eToro will be the number one broker in Crypto Trading by 2021.

Exchange-Traded Securities In addition trading CFD shares, eToro also provides zero-dollar commissions for US stock trading (not available for US investors) as well as fractional shares. For more information, please see the UK.StockBrokers.com evaluation of eToro.

Platforms and tools

eToro’s most innovative feature is the integration of self-directed and copy trading into a single trading experience. It’s a winning combination. Check out our Top FX Brokers For Copy Trading 2021.

Ease-of-use: The core of the eToro platform experience lies in the ability to quickly create watchlists, add instruments by searching for available markets, and place trades directly from each watchlist. These design characteristics helped eToro to rank Best in Class for the Ease category and for Beginners in 2021.

CopyPortfolios CopyPortfolios are an innovative tool where eToro groups traders in a single fund that you can copy trade. CopyPortfolios are a way for passive investors to create a portfolio based on one or more CopyPortfolios. CopyPortfolios can be used by self-directed traders to diversify their trading. This is a potential benefit for all eToro clients.

Cryptocurrency Tools: eToro customers can search for crypto trading ideas, copy other traders, and create groups of traders across 94 supported crypto pairs. eToroX provides the eToro mobile wallet app for investors who wish to hold crypto assets. This app serves as a custodian and uses a multisignature scheme. It is almost identical to the brand’s forex mobile application.

Copy trading structure All traders who trade on eToro manually. eToro does not allow fully automated trading systems such as the MetaTrader. You can ensure that any trades copied by another trader on eToro are being placed manually. This is a useful quality to know, as other social trading platforms that aggregate performance of traders often permit discretionary (manual and automated) trading, while eToro’s only allows manual trading.

Research

Overall, eToro’s search is competitive, but not award-winning.

Research Tools: A standard economic calendar, earnings calendar, news headlines and daily market analysis series are all available. Several of these features, however, are not integrated directly into the eToro platform.

Fundamental Analysis It’s worth noting that eToro does a great job incorporating fundamental analysis into their platform for shares trading. Despite this, eToro is still behind IG , Saxo Bank, and in this category. This is because there are very few articles by eToro’s in-house team under the market analysis category.

Sentiment Data: Rather that showing sentiment based upon all users, only top traders at eToro use sentiment data to calculate it (taking it a step beyond the usual sentiment tools brokers offer). This is similar to how CMC Markets displays sentiment data.

Wall newsfeed eToro uses a Twitter style wall feed that allows for collective commentary about a particular instrument. This public feed is a stream of updates that other eToro users provide to give traders an overview of what trades are discussing in the eToro community. This content is sourced from eToro users, and may vary in quality. Although it is unique, I find that content generated by either in-house employees or third-party professionals is of higher quality.

Education

eToro hosts weekly webinars, and offers a decent range of educational content on its website. It also has materials from other categories like research and company announcements. Navigation is the only problem. It is hard to filter and browse for what you are looking for, as education is not all in one place. You can compare this with education leaders FXCM and Saxo Bank.

Education articles: There are only five articles on the crypto blog under the “Education” link from the main dropdown menu. The main eToro website has video tutorials as well as a “Trading School” section.

Integrated educational material: eToro took it a step beyond the standard explanation text that is found next to each symbol in its platform. eToro offers additional information to beginners about symbols like the EUR/USD.

Trading School A few videos are available under eToro’s “Trading School”, which I found very basic. There are many videos available on the broker’s YouTube channel. These include seven archived webinars, content about cryptocurrencies and shares, and platform tutorials.

YouTube videos I found it difficult to differentiate between promotional and educational videos, as there were occasional overlaps across the themes.

Mobile trading

Overall, eToro’s mobile experience has been excellent. eToro’s Android mobile app was tested and it maintained the same look and feel as the web version. It also has a dark theme and a light theme. Functionalities such as sync watchlists and syncing help to unify platform experience across devices.

Charting The charts, like the rest of the app, were responsive and closely matched that of the web platform. However, only five indicators are available on the web, whereas 67 are found on the mobile site. The app was missing drawing tools, which would have been a great addition. The charts in the mobile app work well and are well integrated, despite not having drawing tools.

Cryptocurrency wallet Users can use eToroX’s separate mobile app to deposit and withdraw real cryptocurrencies. The eToro Wallet is very similar to the eToro app’s look and feel, with social trading support.

Last Thoughts

eToro is a great platform for retail traders looking to crowdsource investment ideas through copy trading or for active traders who want to share their knowledge with others traders.

The platform’s user-friendly interface may be a benefit to less experienced traders who need assistance. Nevertheless, I don’t recommend eToro to high-volume traders or active traders because of the higher spreads and smaller trade size.

eToro is our top choice for social copy trading and crypto-trading in 2021. We also awarded them the #1 Trader Community award.

FAQs

Is eToro reliable?

eToro has been trusted by more than 5 million traders worldwide. It is licensed in many countries to provide brokerage services and funds management. eToro will be listed on the NASDAQ by Q3 2021 following a $10.4 million merger. You should avoid falling for a scam by only using reputable brokers. eToro is a trusted broker.

Trust in financial services is determined by proper licensing, operation history, sufficient financial capital to ensure solvency and excellent customer service. eToro has demonstrated its ability to earn clients’ trust in all these areas.

Is eToro truly free?

Spreads include the cost of eToro’s copy-trading services. Although it is “free” to use eToro, there are still trading costs such as the bid/ask spreads.

Online brokers can charge spreads or commissions (or a combination thereof), and may also receive rebates. Spreads are all you pay, but carry costs can be added if your position is held overnight.

Is it possible to make money using eToro

eToro can help you make money, but it is not guaranteed. eToro’s social copy trading capabilities are its value proposition. This allows you to choose from its huge database of traders and execute copy trades in real-time. You can lose money when you trade forex, stocks and CFDs.

Making the right trading decisions and taking risk management steps are key to earning money with eToro. This applies to both copy-trading and manual trading.

Copy-trading on eToro requires that you do sufficient analysis to analyze the investor database and decide which to copy and how much. You also need to set a maximum draw-down limit, which is a value that stops you from copying if you exceed a certain loss threshold.

Are eToro’s beginner-friendly features worth it?eToro can be a great choice for beginners. The trading platform is simple to use and not too complicated. eToro balances useful features and features in a web-based platform and mobile trading application that is easy to use. Although eToro is not easy to use for beginners, it is easier than other more advanced trading platforms.A challenge for beginners on eToro may be to conduct sufficient analysis in deciding which investors they should copy. This includes looking beyond the absolute returns a trader has earned.You might also consider the risk score and the average trade volume per week for the investor you are interested in copying.

What kind of broker is eToro?

Depending on which entity holds your account, eToro may act as a market-maker broker or an agency broker. Agency brokers are the counterparty to your trade. Market-maker brokers will send your order to market-makers in exchange for rebates, profit sharing, and commissions.

eToro U.K. or eToro Europe can, for example, act as market-makers and also act as matched-principals (agency brokers) if necessary as part of their internal risk management process. It is important that brokers follow best execution regulations. eToro has a legal obligation to do this.

About eToro

eToro, a pioneer in social copy-trading, was established in Israel in 2007 to develop financial trading technology. It launched its first product and has grown to serve over 15 million users. With an innovative platform, which is constantly evolving to become one of the most popular social networks worldwide, clients are located in more than 170 countries.

eToro, which announced it had raised $100 million in private equity financing, led by China Minsheng Financial and the SBI Group. The company was valued at $800 million. The brand’s crypto-exchange, eToroX is regulated and registered with FinCEN in the USA as a Money Service Business. Learn more about eToro on Wikipedia.

Disclosures

eToro, a multi-asset platform that allows both stock and cryptoasset investing as well as trading CFDs, is multi-asset.

CFDs can be complex instruments that could lead to rapid loss of money due to leverage. This provider is responsible for 68% of all retail investor accounts losing money trading CFDs. It is important to understand the basics of CFDs and assess your ability to afford the high-risk of losing your money.

Past performance does not necessarily indicate future results.

Cryptoassets can be volatile instruments that fluctuate rapidly and are therefore not suitable for all investors. Trading cryptoassets via CFDs is not covered by any EU regulatory framework.

eToro USA LLC is not a broker of CFDs. It makes no representations or assumes any liability for the accuracy and completeness of this publication. This publication was prepared by our partner using publicly available, non-entity specific information.