This article is an eToro review, which is a cryptocurrency exchange platform that has become a trendsetter in the space over recent years.
We found eToro to be easy to use for a new trader. It is an ideal learning platform that allows traders to see what the professionals are doing and even mimic their moves. While it is innovative, social, and has low minimums, it does have its limitations. The fees are based on a spread that changes with the market and can be challenging to understand for someone new to trading.
What You Will Learn…
You will learn the details of eToro to help you decide if it is the best trading platform for you. We will go through all of the features in depth so you can gain an understanding of what eToro has to offer. In addition, we will spend some time reviewing the fee schedule in hopes of making it easier to understand.
You will learn about some other options if you are not sure if eToro is the right trading platform for you. This particular eToro review will help you make the ultimate decision of forging into the world of cryptocurrency trading with eToro or not.
eToro has a list of helpful tools and features contained in the innovative platform, which we have outlined here in this eToro review.
eToro Overview
eToro is a company that is based in the United Kingdom that was founded in 2007. It is known for being one of the leading forces for investing and social trading. On the eToro platform, traders can network and interact with other traders to learn strategies utilized by other traders. eToro is geared more to the beginning trader. It has an easy to use and intuitive interface. eToro does make use of a digital wallet to store cryptocurrency. In addition, they provide a large number of financial tools and trading features to assist you. eToro is also a brokerage platform that extends beyond cryptocurrency to include the stock exchange, forex, and commodities trading, along with many others.
It is important to note that even though eToro offers other trading options such as stock and commodities, those in the US can only trade cryptocurrency for now. eToro has the plan to extend that in the future. eToro extends to over 100 countries with more than 17 million users. They are licensed to operate in Europe, the UK, and the US. It also maintains a custodial approach to assets on the platform. eToro offers a premium membership giving users additional benefits that are based on their balance.
Pros:
- Provides support for the leading cryptocurrency options
- Provides access to a mobile app
- Regulated for security
- The interface is easy to use
Cons:
- There is no option for self custody
- Fees for crypto trades can be high
- Limited opportunities for US trader
Next: The absolute best eToro alternatives today
Should You Consider eToro?
eToro is ideal for a specific type of trader. It provides a platform for newer traders to buy and sell a large amount of cryptocurrency. It offers social trading, which is attractive to younger traders. The social aspect of eToro gives you the opportunity to follow someone that has a record of performing, although these traders tend to make riskier moves. If you want to do want they do, you have to be prepared for the risk. eToro is available in only 43 states, so you want to make sure it is available to you. eToro is safe and provides some amount of security. There are larger platforms that have more robust security options.
Features
Security
As a trader wanting to buy and sell cryptocurrency at this level, you expect to see a high level of security. You want to feel confident that your information and cryptocurrency are safe from hackers and fraudsters. You also want to feel secure that the platform will not take your information and use it in ways you do not like or did not give them permission to do. In short, you want to be able to trust the eToro platform.
eToro is highly regulated by the Financial Conduct Authority (FCA) of the UK and the Australian Securities and Exchange Commission (ASIC). It also utilizes SSL encryption, which is the standard for online encryption and security. The platform also uses two-factor authentication and monitoring tools that are considered state of the art. All of their cash assets are held in FDIC insured bank accounts.
Fees
It is critical to understand the fee structure of any online platform that you use. Fees that you pay impact your bottom line, so before you get started, you should understand how eToro handles fees.
On the surface, eToro offers zero commission, but there are some details of which you should be aware. Instead of a commission, eToro uses a bit of a complex fee structure. They utilize a spread to determine how much to charge. Their spread is based on the condition of the market at any moment and the particular cryptocurrency. It also increases their profit margin between the buying and selling prices on the platform. The eToro spread has a significant variance to it, between 0.75 percent to 2.9 percent. The spread can go as high as 5 percent for Tezos. In addition to this spread, eToro has minimum amounts. There is a $10 minimum for trading crypto, but that minimum goes up to $50 when using a debit card or bank account. There is a minimum deposit amount of $200.
Next: Our comparison of eToro vs eTorox
Cryptocurrency
While eToro has an excellent offering of cryptocurrency, it is not the most extensive selection you will find on a trading platform. In addition to their crypto offerings, they are expanding to commodities, shares, and ETFs. They offer about 19 tokens and 27 cryptocurrencies. While there are too many options to list here, some of their most popular options include Bitcoin, Litecoin, Ethereum Classic, and Ethereum, just to name a small amount. Unfortunately, direct crypto to crypto trading is not currently available in the US. eToro does offer a crypto to crypto conversion option for specific coins.
eToro offers a digital wallet that is free to all users. A digital wallet is a place where a trader can store their cryptocurrency. It may also be referred to as the eToro wallet. There is a price for converting crypto into fiat currency, though. The cost to convert from one to the other is 5 percent. This fee may feel like a high price to pay for some traders. As with all fees, it comes directly from your bottom line. There are the minimum and maximum transition amounts in place. The minimum amount is $125, and the maximum is $10,000.
eToro Club
eToro offers a unique membership club for its users. This membership club is considered a premium membership and is there to make users feel as though they have achieved something significant by gaining access. The features of the club that are provided to each user are directly related to the balance. The way eToro calculates your balance is by determining your realized equity, which is equal to the amount you have spent to make purchases plus the cash holdings you have. Therefore, the membership does not become available until you have purchased $5,000 of crypto assets or have that much in cash holdings in your account.
When you participate in this membership, you receive expert trading support that is dedicated to you. You get analyst reports and a market newsletter. You also have access to live webinars, new products, services, and features. When you are part of the eToro membership club, you have access to live chat customer support.
User Interface
Being able to use the trading platform interface is critical to your success. You want an interface that is intuitive, especially for those that are newer to trading and trading platforms. eToro has a large number of features that provide tools to new traders that will help them learn and grow into more experienced traders. eToro also offers a mobile app available on iOS and Android so that you can trade on the go.
Creating an account on eToro is quick and easy. In really no time at all, you can gain access to the platform and create an account. There is a dashboard that resembles most social media platforms which makes it easy to use and provides a comfortable environment to new users, especially millennials. This platform allows you to see what other traders are saying and thinking about crypto options. It can give you some information about whether you should buy or sell. The eToro interface offers a sentiment calculator. eToro takes great pride in the social aspects of its platform. They market themselves as a social platform. Some traders may not be interested in the social part of eToro. They are simply interested in going into the platform and making their trades to earn money. They do not want to get hung up on the social interaction with other users.
Withdrawal Capabilities
Another important aspect of this trading platform is the way it accepts deposits and provides you access to withdrawals. If you understand this before you create your account, it can save you strife later on when you are attempting to access your money. When you want access to your money, you want it then. No one really wants to wait to get their own money.
eToro accepts many different ways for you to give them money. You can use bank transfers, credit cards, debits cards, PayPal, Skrill, and Neteller. eToro uses a crypto wallet, allowing you to transfer some crypto out of the platform. An important note is that you are not able to transfer funds out of your eToro wallet back into your associated account. It will take about 24 hours before any of the funds show up in your wallet. It does take even longer when you want to move your funds out of your eToro wallet. There are fees associated with moving your non-US dollars in or out of your eToro account. You can also expect a standard fee for withdrawing your money. There is a minimum amount for all transactions.
Alternatives
Perhaps you are not are if eToro is the best option for you. However, there are some alternatives available to you that you can consider for a trading platform.
Webull
Webull is better suited for a more advanced trader. They offer features that those who are experienced are better prepared to use. They use technical indicators and allow users to trade stocks and ETFs. Webull also offers low fees and ample bonus opportunities. Their margin rate is highly competitive. It is intended for those who plan to be active traders. Webull offers real time quotes and extended hour and pre-marketing trading windows. Webull does not allow the option of earning income on excess cash.
See a full comparison of Webull vs eToro here.
Kraken
Kraken is an alternative trade platform that is well liked by its user community. Many traders feel that Kraken provides a better value for their money and for the cost. Kraken has close to four million users, with many of them active, making it one of the largest trading platforms in the US. It has been in operation since 2011 and has had a solid reputation ever since. Kraken offers a more significant number of cryptocurrencies for purchase and trade. Kraken has an upfront trading fee schedule with relatively low trading fees. This platform provides you the ability to earn rewards. Kraken has been well tested and provides some of the highest levels of security available. It offers a mobile application and high-quality customer service. There are some downsides of which you may want to be aware. They include that you cannot use debit or credit cards. When first creating an account, it can take up to five days to complete the verification process.
See our full comparison of Kraken vs eToro here.
Coinbase
Coinbase is another alternative option to eToro. The Coinbase platform has been around for quite some time, but cryptocurrency is relatively new to the platform. Coinbase is a trading and investing platform with over 73 million users and $255 billion in assets. Users can buy, exchange, or sell more than 100 cryptocurrencies on the platform. Coinbase is an ideal platform for new and experienced traders as it has features in which both types of users may be interested. Newer users may only use the platform for simple buying and selling transactions. More experienced users, on the other hand, may access the more robust features such as Coinbase Pro, which offers access to lower pricing options. Coinbase provides you with opportunities to earn cryptocurrency. There are some downsides to Coinbase, including they have been known to have customer service complaints. You may find that there is potential for high transaction fees for those using the primary platform. You will be enticed by the Coinbase Pro option.
See our full comparison of Coinbase vs eToro here.
Closing Thoughts
This eToro review has shown that this trading platform provides advantages to the user that is new to trading. It also offers a social networking aspect to it that many people enjoy. You can meet other traders and learn from them. Social networking with eToro is a way of interacting that many people feel comfortable with and could draw in users. In addition, it is an excellent way for a newer user to learn tips and tricks about trading.
eToro offers additional features like CopyTrading. Access to CopyTrading allows you to follow experienced traders to understand the steps they took and how they went about buying and selling. Using the CopyTrading feature is a great way to learn from someone that has made the right moves. However, it also has a fair amount of risk involved. Many of these traders make risky moves that work well for them. However, not all traders, especially newer ones, may be willing to take those risks. It is, however, an excellent way for new users to learn.
Keep in mind the fee structure. That may seem complicated and confusing. What is most critical to remember is that it changes based on the market and the specific type of cryptocurrency. If you keep that in mind and pay to attend to the spread percentage, you will know how you will be impacted.
All that is left for you to do now is create an account. It only takes minutes. Once you navigate to the eToro site, you will find buttons that say ‘signup,’ ‘start now,’ or ‘trade now.’ If you do not already have an account, you will be directed to create one. You can provide all the required information or sign in with Google or Facebook. eToro does request that you review the Terms & Conditions and the Privacy Policy. Once you submit, there is another questionnaire you must fill out providing further information before you can access the platform and trading. This additional information ensures the eToro is in compliance with the standards and regulations set forth by the governing bodies. If you do not provide this information, you cannot gain access to trade on the platform.
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