eToro is a well-known trading and investment marketplace that lets you trade stocks, commodities, indices, and crypto around the world. In the U.S., however, you can only trade cryptocurrencies, stocks, and exchange-traded funds (ETFs) on the platform.
In addition to allowing you to trade crypto, the eToro trading platform allows you to copy the crypto trading strategies of successful traders. In this eToro review, we’ll help you decide whether eToro is right for you.
Build a crypto portfolio fast by copying what top traders are doing.
- Build a diversified portfolio with popular coins
- No hidden fees
- $100,000 virtual portfolio to practice with
- Copy the strategies of top traders
What is eToro?
eToro was founded in Tel Aviv in 2007 by David Ring, Ronen Assia, and Yoni Assia. Including its main office in Tel Aviv, eToro has 10 offices worldwide, including the U.S., the U.K., and Cyprus.
At its core, eToro is a social trading platform that lets you see what other traders are doing and copy their strategies. The company claims that more than 25 million traders are using the platform.
However, it’s important to note that eToro’s offerings are limited in the U.S. eToro isn’t available in all states, and only cryptocurrency, stocks, and ETFs can be traded at this time. Yet, for those looking for an easy way to invest in alternative assets such as cryptocurrencies, eToro could be a good choice.
|Account types available||Taxable accounts|
|Best for...||Those who want to copy others’ trades and want easy access to crypto trading|
What does eToro offer?
If you’re interested in learning how to buy cryptocurrency, eToro could be an easy way to get started. eToro also provides investment options for popular U.S. stocks and ETFs.
The platform offers access to over 50 popular crypto tokens, including:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Stellar (XLM)
- EOS (EOS)
- Dogecoin (DOGE)
- Tron (TRX)
eToro only offers taxable investing accounts so you can’t open a tax-advantaged retirement account with the platform. You also won’t be able to access other financial products and services, such as savings and checking.
eToro requires a minimum deposit of $10 to get started. Each trade also requires a $10 minimum, so it’s important to carefully consider your situation before you make a trade. Trading is available in the District of Columbia and all states except Hawaii, Minnesota, Nevada, New York, and Tennessee.
Here are some of the features offered by eToro.
A unique trading feature of the eToro platform is the ability to see what other traders are doing and copy their moves. With CopyTrader, you can follow experienced traders and do what they’re doing in real-time.
Top-performing traders are featured with CopyTrader, and you can opt to copy their investment strategies automatically. There are no management fees involved with CopyTrader, so you don’t have to worry about extra costs. You just choose a trader to copy and make a move when they do.
Currently, CopyTrader is limited to cryptocurrency trading only. eToro has announced plans to add stocks and ETFs to this feature.
Smart Portfolios (formerly CopyPortfolios) are curated collections of crypto assets and traders you can copy to diversify your investments. These include Top Trader Portfolios composed of the best-performing investors on eToro, Thematic Market Portfolios with selections of assets bundled according to predefined themes, and Partner Portfolios created by eToro’s investment partners.
eToro offers a free $100,000 virtual portfolio for you to practice with. This virtual trading account provides you with a way to test different strategies and learn the trading platform before you risk any real money. You can also take advantage of the social aspect of eToro by asking questions in the community and discussing strategies with top performers.
eToro Club is available to traders with a minimum balance of $5,000. eToro users get access to webinars, subscriptions, trading signals, investment advice, and more based on your membership tier.
Club tiers start at a minimum $5,000 balance for Silver membership, which includes a dedicated account manager and a quarterly market analyst report, to a $250,000 balance Diamond membership that adds additional subscriptions and VIP entry to eToro Diamond events. Acceptance is automatic when the equity in your account meets the minimum for each club tier. You do need to select any new benefits in your account to receive them.
eToro Money is a crypto wallet (formerly called eToro Wallet) that integrates with the platform. You can easily send your tokens from the crypto exchange to the wallet with no trading fees. It’s important to note, however, that if you transfer money from your eToro portfolio to your wallet at eToro Money, you won’t be able to send it back to your eToro portfolio account.
eToro offers a mobile trading app for both iOS and Android devices. The eToro mobile app is one of the best investment apps, with a user-friendly interface that lets you quickly and easily place crypto trades from the palm of your hand no matter where you are.
FDIC and SIPC insurance
USD funds are FDIC-insured up to $250,000 and held in a custodial account. However, it’s important to note that FDIC insurance doesn’t apply to cryptocurrency balances, only cash holdings.
U.S. stocks held in your eToro account are also covered by SIPC insurance as well as by supplemental insurance. If SIPC insurance limits are exhausted, the supplemental policy protects securities and cash up to $150 million, subject to sub-limits for each customer of $37.5 million for securities and $900,000 for cash. It’s important to note that SIPC insurance does not cover losses incurred due to a drop in the market value of the securities held in your brokerage account.
Pros and cons of eToro
- Customized trading dashboard (Watchlist)
- Social and copy trading lets you learn from successful traders
- Low investment minimum of $10
- No management fees and no commissions
- Demo account of $100,000 in virtual money
- Not available in all U.S. states
- High fees on some digital currencies
Who can open an account with eToro?
Anyone who is the age of majority in a state where eToro is available can open an account with eToro. Once you open your account and verify your identity, you can start trading with as little as $10.
eToro could be a good fit for someone interested in learning how to invest money since the social trading aspect allows you to learn from others. You can even copy how others trade and apply their strategies to your portfolio. Keep in mind, however, that other traders may have different investment goals, and their strategies might not be right for you.
How much can you earn with eToro?
As with any investment, it could be possible to earn a good return with eToro. However, your potential return depends on the asset, timeline, and your risk tolerance. eToro offers access to cryptocurrencies, which are known for their volatility. As a result, there could be a potential for big gains as well as big losses.
Stocks are often less volatile than crypto, yet still carry significant risk. ETFs track the return of a portfolio of assets, resulting in a more diversified investment. Nonetheless, each of these asset classes, traditional and alternative, can incur losses.
FAQs about eToro
Is eToro legitimate?
Yes, eToro is a legitimate company. It has been around since 2007 and is one of the most well-known platforms in the world, even though its offerings are limited in the U.S.
Is eToro a good investment?
Whether eToro is a good investment depends on your goals and strategies. For those wishing to learn about trading and practice different strategies, eToro can be a good choice. Before you invest with eToro, it’s a good idea to use the demo account to practice strategies and consider copying others’ trades to get a feel for what to expect and how to move forward.
Is eToro really free?
eToro charges no management fees or trading commissions. eToro makes money on the spread when you trade. As of February 2022, eToro fees for BTC were at 0.75% with a spread of 1.9% to 4.9% for other cryptocurrencies.
The eToro Money wallet does have its own fees, however. There is a conversion fee of 0.1% when you convert from one crypto to another, a transfer fee when sending funds from the eToro investment app to the eToro Money crypto wallet, and a $5 withdrawal fee. Additionally, you might be subject to blockchain fees, which are charged when you use a blockchain platform.
Which is better, eToro or Binance?
Neither eToro nor Binance is available in every U.S. state, so one might work better based on where you are. Binance has a larger list of available coins as well, so you might prefer Binance if you want to trade more tokens and currencies.
How to open an eToro account
Opening an account with eToro is fairly straightforward. Simply click on the “sign up” button to create an account and start trading. To open an account, you need to provide your name, address, birth date, and Social Security number. If you want a verified account, you also need to provide documentation showing your identity and your proof of address.
You will need a funding method when you open an account with eToro. You can connect your bank account or use a debit card or credit card. It’s also possible to fund your account using a wire transfer.
Other investing platforms to consider
Prior to offering ETF and stock trading to U.S. customers, eToro ranked among the best cryptocurrency exchanges. As a full-fledged investment platform, however, it now competes with other investing platforms as well. You can also check out some alternatives to eToro in our review of the best investment apps.
The bottom line on eToro
With a low investment minimum, no management fees, and social trading features, eToro may be appealing to new and inexperienced investors looking to break into the world of investing. However, beginners should be cautious about copying the strategies of “experts” as it could set them up for disappointment if they aren’t clear on their own financial goals and risk tolerance.
Disclosure: The author has positions in some of the assets included in this article, including Bitcoin, Ethereum, Dogecoin, Cardano, and Stellar. She has also used eToro in the past.