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eToro is for the investor willing to manage his/her own investments and works well for both the active (day trader) and the occasional investor.
What sets eToro apart is its social and copy trading. Ever wish you could just copy another investor’s portfolio? With eToro, you can.
Check out our review on this fairly new platform to see how it works.
What is EToro?
EToro is a worldwide broker offering social investing. This unique tool helps users copy trades of other successful investors. In the US, the only assets offered are cryptocurrencies, although eToro trades stocks, forex, and other commodities in its other 139 countries.
With eToro, you can start trading based on your insights and desires or copy that of another trader right off the bat. You choose the trader and eToro does the rest. Every time ‘your trader’ trades, you trade, it’s that simple.
How does it work?
Opening an account is easy, but it takes a little time to verify your account and begin trading. Once verified, you must deposit at least $50 and you’re ready to trade. You can trade in any dollar amount from $25 and up, and can buy fractions of assets rather than an entire unit if you don’t have the funds.
Deposit and Withdrawal
Like the opening balance, there’s a minimum $50 deposit amount for each deposit. You may deposit via electronic transfer. If you prefer wire transfer, you must deposit at least $500.
You may withdraw funds at any time, but only if you have at least a $50 balance. If you don’t have a $50 cash balance but have open investments, you may close them to have more funds available for withdrawal. It takes up to 7 days to complete a withdrawal.
eToro has a desktop and mobile app, both with a user-friendly and clean interface. Both platforms allow you to execute trades, copy trades, and follow your social feeds.
What can you trade?
As I said above, eToro only operates in cryptocurrencies in the US right now. They have plans to expand their offerings in the future.
As of today, they have 15 cryptocurrencies you may trade. A few examples include Bitcoin, Ethereum, Dash, and Litecoin, among others.
Pricing varies based on the market trends, but eToro is transparent with its pricing and recommends investors check their website often. The average fees range from 0.75 percent to 2.9 percent. There are also crypto-to-crypto conversion fees of 0.1 percent and crypto-to-fiat currency conversion of 5 percent.
- Social Trading – Follow and copy the traders you choose by clicking a button. Automatically copy what they do and/or add a stop-loss option to limit your losses. You must invest at least $200 to copy an investor. You may copy as many as 100 investors at one time. If you don’t want to copy, but just follow investors, you may follow as many investors as you want.
- Digital wallet – You store your cryptocurrency in a virtual wallet, called the eToro wallet. If you want to covert the cryptocurrency to US dollars, you’ll pay a 5 percent fee. You need to convert a minimum of $125 at a time.
- Customer service – eToro’s customer service is available as an online forum. You submit a ticket and they’ll respond to you in the order of receipt, which currently is 7 days.
- Research – Get the latest trends, news, and charts on eToro’s website.
- Education – eToro offers basic educational materials about cryptocurrency, including how to buy it, and important information.
eToro Pros and Cons
Is eToro trustworthy?
eToro has been in the fintech industry for the last 10+ years and is regulated by FCA and CySEC. They are a licensed broker in Europe and the UK and are licensed in the United States, reassuring investors of their trustworthiness.
Is eToro good for beginners?
The social trading platform is good for beginners because you can copy an influential trader’s portfolio. While you still need an understanding of cryptocurrencies as there’s no guarantee of a return even when you copy someone influential, it is a great way for beginners to start. If crypto is not a priority for you, check out this article about the best robo advisors for beginners.
What are round-turn spreads?
eToro charges round-term spreads or the same spread for buying and selling cryptocurrency. This makes it easier to determine your commissions, rather than trying to figure out the different commissions for buying and selling.
How long does it take to open an eToro account?
It may take you 10 – 15 minutes online to start your account, but eToro takes 1 – 4 days to get your account up and running. They must run verifications on your identity to ensure you are who you say you are before they process the account.
Do you have to sell an entire lot or can you sell a fraction of it?
You must sell the entire lot of cryptocurrency that you buy. For example, if you invest $50 in Bitcoin, you must sell the entire $50 worth; you can’t sell just $25 worth and keep the other $25 invested.
Is there live broker support?
No, eToro doesn’t offer live support. Instead, they recommend that you go through their database to find out if anyone else asked your question. If they didn’t, you may submit a question in the online forum. It takes eToro representatives approximately 7 days to respond and the answer is public for everyone to see.
Do you have to invest as much as the CopyTrader you choose?
You are free to invest as little or as much as you want. Your investments will copy the CopyTrader you chose in prorated amounts. Don’t shy away from copying someone you want to copy just because you only have a small amount to invest. You’ll still get the benefit of following a successful investor, just at the rate you can afford.
eToro vs M1 Finance
If you’re a DIY investor looking for a hands-off approach to investing, consider M1 Finance. This unique robo-advisor gives investors a say in their investments while automatically rebalancing them if they fall off target.
As an added benefit, M1 doesn’t charge management fees and only requires a $100 investment for taxable accounts and $500 for retirement accounts. M1 is best for investors with an idea of how to invest, as M1 provides very little support or assistance when choosing investments. M1 doesn’t offer tax-loss harvesting though, which means the tax liabilities may eat at your earnings.
eToro vs Webull
Webull is another commission-free robo-advisor, but is geared to investors looking for technological investments. Webull is much more technical than eToro, but provides investors that know what they’re doing with both taxable and retirement accounts and it runs primarily on as a smartphone app. Webull doesn’t have a minimum investment requirement, but they also don’t allow joint accounts – individual accounts only.
eToro vs Robinhood
Robinhood was one of the first robo-advisors to go commission-free. Since then many brokers have followed their lead, but Robinhood is still a great option. Investors looking for more than ETFs but with no commission fees should consider Robinhood because you can invest in stocks, options, and cryptocurrency too.
Robinhood doesn’t have a minimum account balance requirement but they also don’t offer retirement accounts. One definite perk is the ability to buy fractional shares, leaving little cash drag behind.
There are currently no promotions.
Worth It or a Scam?
At first glance, eToro looks like a scam, especially since they recently came to the US and aren’t available in every state. However, eToro is reputable. They are licensed and regulated, providing investors with another way to diversify their portfolio in a unique and fun way.
Trading, like most other financial transactions, has gone social with platforms like eToro. In business for more than 10 years, eToro is making its way to the US, giving everyday investors a chance to get into the investing game by investing in cryptocurrency.
If cryptocurrency interests you, consider eToro.
It’s great for beginners and experienced investors. The social trading platform takes it to an entirely new level, giving you something unique and exciting to consider. With more than 15 cryptocurrencies to choose from, you can experiment (or even experiment with a virtual account) and see what copying successful traders does for you.
Michael is a senior writer at The Robo Investor. He earned his master’s at the Craig Newmark School of Journalism at CUNY, and is currently taking CFP courses at the University of Scranton. He has been an avid finance enthusiast ever since he started investing at the age of 23. Meet the Team