Undoubtedly, the “centralized vs decentralized” debate is still alive within the crypto industry. Most crypto heads tend to avoid projects or companies with more centralized profiles, especially since the rise of decentralized finance and all the frenzy surrounding crazy yields and complex strategies. While DeFi and Ethereum are still the flagships in terms of innovation in the crypto market, it is undeniable that centralized affairs such as Bitcoin still hold their fair share of importance in the industry. It is the case with eToro, which is a fully regulated global trading platform for cryptocurrencies and other financial products.
Currently boasting 7 million users nowadays and mainly focused on cryptocurrencies, the Israeli-born company has an easy to use and reliable market-making mechanism to facilitate multi-asset trading.
What Is eToro?
Founded back in 2007, eToro was founded in Israel, being one of the pioneers of social trading. Available in 140 countries, this multi-asset brokerage offers a market-making interface where investors can trade assets such as cryptocurrencies, commodities, indexes, stocks, and currencies.
The service is available in the US as well, but so far American customers can trade only cryptocurrencies on the platform.
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When it comes to regulation, the company is registered in Cyprus and is regulated in several countries worldwide. Even though eToro is not licensed by the US SEC (Securities and Exchange Commission), the company offers several international credentials that imply trust and comfort in potential users.
Although any US resident can create an account for virtual trading, residents from only 41 states have actual access to cryptocurrency trading.
At the state level, eToro is currently unlicensed for cryptocurrency trading in several states, including Hawaii, Illinois, Delaware, Nebraska, New Hampshire, Nevada, New York, and Tennessee.
Dig Into It
Unlike other similar platforms in the market, eToro allows investors to copy and follow other trader’s strategies. It can be done through an innovative tool called CopyTrader, which allows anyone to copy and trade automatically based on another trader’s moves.
Plus, investors have the option to enable a stop-loss level to limit potential losses in such mirrored positions. eToro’s customers are allowed to copy up to a hundred traders simultaneously, with the permitted amount ranging from $200 (minimum) to $500,000 (maximum).
It is noteworthy to notice that currently, US users can copy only other US users.
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There is also the CryptoPortfolio, which is a feeless feature that allows customers to invest in long term strategies using a multi-cryptocurrency portfolio.
Many people came to know eToro for its digital wallet, which is available for both Android and iOS. While the wallet is good for those interested in trading and transferring funds, it is still a custodial wallet, which means users do not have actual control over their assets.
When it comes to converting cryptocurrencies into fiat currency (e.g., US dollar) and vice versa, the conversion cost is fixed a 5%, with transaction thresholds ranging from $125 (minimum) and $10,000 (maximum).
eToro X – Trading Tool for Seasoned Investors
On eToro.com, which is the company’s standard trading platform, users have limited access to their assets, as it is suitable only for pure speculation.
Meanwhile, it is also possible to use eToro X, which is a fully regulated cryptocurrency exchange, where investors are allowed to access and withdraw their tradable assets.
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This crypto-only exchange has functionality more oriented for advanced traders and speculators. Currently, eToro X supports stablecoins instead of fiat currencies for the majority of trading pairs available.
It is also noteworthy to remember that many of these stablecoins are issued and backed by eToro itself, which can be risky for users in the case of economic upheaval.
Cryptocurrency – Available Options
Despite the many possibilities offered by the platform, users tend to rely upon it more as a cryptocurrency trading platform than a multi-asset trading tool.
So far, US customers have 15 options of cryptocurrencies to trade, which is a high number of offerings when compared to other similar projects. Users can trade:
- Bitcoin (BTC).
- Ethereum (ETH).
- Bitcoin Cash (BCH).
- Ethereum Classic (ETC).
- Ripple (XRP).
- Litecoin (LTC).
- Dash (DASH).
- Stellar Lumens (XLM).
- Cardano (ADA).
- Tezos (XTZ).
Everybody Hates Fees
When it comes to trading costs, eToro is considered a high-spread platform where customers tend to be exposed to higher fees.
The platform charges trading fees via spreads, which typically range between 1.9% and 2.9%. However, there are cases in which people are exposed to 5% spreads when trading Tezos and 0.75% when trading Bitcoin, for example.
For those unaware, the spread is the difference between the price at which a market-maker is willing to buy an asset and the price at which it is willing to sell the same asset.
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The platform also bills a fixed $10 withdrawal fee, and dormant accounts have to pay a $10 fee per month of inactivity. In this sense, some customers criticize the platform for charging round-turns, which means one spread for both buying and selling cryptocurrencies.
Although high fees are never justifiable, in the case of eToro is can be at least understandable, due to its unique tools and innovative features.
eToro is a reliable company that acts as a market-making platform focused mainly on cryptocurrencies. Plus, it offers a great multi-asset trading platform with notable ease of use and unique features.
Users can reproduce another user’s strategy with CopyTrader, speculate on crypto assets using eToro.com, use the advanced eToro X to access and withdraw crypto funds, and invest in long term crypto-based strategies with CryptoPortfolio.
Currently, US customers have 15 different cryptocurrencies to trade, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and many more.
However, nothing is perfect in life, neither is eToro. High spread and high fees can affect the user’s experience negatively, as well as the limited access and control over assets (which includes eToro’s wallet).