Editorial Review

EToro Review 2020: Pros, Cons and How It Compares

A pioneer in social and copy trading, eToro has launched in the U.S. The company offers investors the ability to copy the trades of pros, but it currently offers only cryptocurrency trading, which is notoriously volatile.

Kevin VoigtFebruary 4, 2020

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Our Take

The bottom line: 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. But consider the risks inherent in trading these highly speculative assets.

eToro

eToro

Fees

0.75% to 2.9%

varies by cryptocurrency

Account Minimum

$50

Promotion

None

no promotion at this time

Pros & Cons

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

  • Trading cryptocurrency is highly speculative and largely unregulated.

  • Service only available in 39 U.S. states.

  • While eToro has forex and equity trading available in other countries, U.S. eToro customers are limited to crypto trades.

Compare to Other Advisors

TradeStation
Robinhood
Fees

$0

per trade

Fees

$0

per trade

Account Minimum

$0

Account Minimum

$0

Promotion

Up to $2,500

cash credit with a qualifying deposit

Promotion

None

no promotion available at this time

Full Review

Founded in 2007, broker eToro has more than 10 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 2020.

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. But it’s important to remember cryptocurrency brokerages are not insured by the Securities Investor Protection Corporation, or SIPC.

EToro is best for:

  • Cryptocurrency traders.

  • Social or copy traders.

EToro at a glance

EToro features you should know 

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 15 cryptocurrencies for U.S. customers to trade, an impressive number of offerings. TradeStation Crypto, for example, gives a choice of five cryptocurrencies, SoFi Active Investing offers three and Robinhood seven.

EToro clients can currently trade these cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, XRP, Litecoin, Dash, Stellar Lumens, NEO, EOS, Cardano, IOTA, Zcash, TRON and Tezos.

Crypto trading costs: EToro charges its trading fees through spreads that may rise and fall with market conditions. In January 2020, 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 eToroX, 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.

Cryptocurrency trading available in 39 states: While all U.S. residents can sign up for a free eToro account for virtual trading, eToro is currently unlicensed for actual cryptocurrency trading for residents in these states: Delaware, Hawaii, Illinois, Louisiana, Minnesota, Nebraska, Nevada, New Hampshire, New York, North Carolina and Tennessee.

Is eToro right for you?  

For cryptocurrency investors who want to mirror the moves of serious crypto traders, eToro’s social trading platform is an attractive offer. With 15 cryptocurrencies to buy and trade, eToro has a greater selection than many other U.S. crypto brokerages.

Still, it’s important to remember that investing in cryptocurrencies like Bitcoin is highly speculative and known for its volatility.