eToro Review: The World’s #1 Cryptocurrency Social Trading Platform
In this eToro review, you will learn why eToro is a tremendous opportunity for both new and experienced traders. The company has been a pioneer in the fintech revolution for more than a decade. As a result, they have become the leading social trading platform in the world. This is all without allowing members from the UNITED STATES to participate. Very exciting news is that eToro is now allowing American members to join their cryptocurrency social trading platform! The following US states and territories are currently able to trade, with additional states to be added soon:
- New Jersey
- New Mexico
- North Dakota
- Northern Marianas
- Rhode Island
- South Carolina
- South Dakota
- US Minor Is.
eToro started as a general forex trading platform but added cryptocurrencies and other trading instruments. This is because the popularity and demand for these products has increased tremendously. There are now more than 6 million users on eToro, making it the number one social trading platform on earth.
How Does eToro Work?
The most important thing to understand about eToro is that they are a CFD (contract for difference) platform. CFD platforms enable their users to speculate on rising or falling prices of the global financial markets.
In layman’s terms, a CFD is a contract between two parties (a buyer and a seller) where the seller will pay the buyer the difference between the current value of an asset and its value at the time the contract is purchased.
In CFD trading, you don’t actually buy or sell the asset underlying the instrument; instead, you buy or sell a certain number of units based upon your prediction of whether the price of that instrument will go up or down. If you make the correct prediction, you receive profit on the existing CFD units you already bought or sold.
However, when you make an inaccurate prediction, you incur a loss for every point it moves against you. Because of the nature of this platform it can be a risky venture for someone who does not understand these basic principles. Please approach CFDs with caution as it is possible for your losses to exceed your deposits.
How is eToro Different?
There are many unique things about eToro. One of the most exciting aspects of the program is that they offer leverage trading of upto 20:1! In case you’re unaware, leverage trading allows a party to trade with more than what is in their account balance (in this case upto 20x more). This allows traders to receive the gains or losses that occur on that larger contract size.
For example, if you were to buy $1000 worth of a commodity with no leverage (1x) and the value of that commodity rose by 1%, you would receive a profit of $10 before fees.
However, if you were to enter the same $1000 into a leverage trade of say 20x, you would effectively be trading with $20000. Meaning that if the value of that same trade rose by the same 1%, you would receive a profit of $200!
Another exciting feature is the ability to trade new and popular commodities. Some examples are the cryptocurrencies Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple amongst others.
eToro also allows its members to trade other more traditional assets. Some of these assets include CFDs, ETFs, Forex, Stock Shares, Commodities and Indices. The platform offers an easy to use mobile app where members can make trades and monitor their accounts on their Smartphone’s or mobile devices.
Because of the various ways to invest and trade, members can utilize the same platform for their cryptocurrency trading needs and their traditional asset needs (at this time US members only have access to cryptocurrency trades). The social elements of eToro also make it unique as well. The “CopyTrading” and “Copy Funds” features, as well as the ability to participate in their “Popular Investor” program is truly one of a kind.
“CopyTrading ” is simply your ability to copy the trades of your favorite traders on eToro. If you are a successful trader, you are able to become one of these “Popular Investors” as long as you have consistent returns and few losing trades, all calculated by your low-risk score. An advantage of becoming one of these “Popular Investors” is that you can receive rewards in the form of commissions for sharing your wisdom with others.
This is a tremendous asset for advanced skilled traders or someone who simply wants to copy the trades of other successful investors. This allows traders to get exposure to certain assets like cryptocurrencies, without having to spend tons of time researching these topics themselves.
The “CopyFunds” option is essentially the same as the “CopyTrading” feature mentioned above that allows investors the ability to copy the trades of other successful traders. The major difference is that the “CopyFunds” option allows you to make longer-term investments by giving you the ability to copy a larger selection of investments rather than just one trade.
Instead of following individual traders, the eToro Investment Committee creates different portfolios of investments themselves, rebalancing them periodically. This gives users access to professionally crafted portfolios of different categories such as CryptoCurrency, Renewable Energy and CyberSecuirty.
Whether you’re a small or big investor, eToro has many different tools that you can take advantage of, all while offering very few barriers to entry. The minimum investment required to participate in the “CopyTrading” function is only $200, while the minimum investment required to participate in the “CopyFunds” function is only $5000.
There are also minimum requirements for manual positions, which are based on the specific instrument you wish to invest in. For example, when creating your own portfolio, commodities and currencies (such as cryptocurrencies) have a minimum quantity requirement of $25; while instruments like indices or ETF’s have a minimum quantity requirement of $200.
While utilizing these functions, there are also minimum requirements on exposures to the various individual products. For example, cryptocurrencies require a minimum $200 exposure, ETFs and stocks require a $500 minimum, while indices and forex require a $5000 minimum.
The nice thing is that this is an exposure-related policy, meaning that even though you may need a $200 minimum exposure, you can satisfy this requirement with only $10 invested if you leverage your position at 20x.
How Does eToro Make Money?
Luckily for traders, eToro has no interest in seeing you lose trades and does not bet against you in the market. Rather, the exchange generates money by the fees that they charge. There are many advantages of this model for traders and their fees are relatively low.
For instance, there is no fee charged for opening a position. Instead, they utilize the spread (the difference in a trading position, otherwise known as the gap between a short position (one that is, selling) price and a long position (one that is, buying) price) to charge their fees.
eToro lists their minimum spreads for each currency. These rates however, are not guaranteed and can change based upon market conditions and liquidity. Another advantage of trading cryptocurrency is that the market never closes. This means there are no fees for overnight or weekend trades. The only other fees eToro charges is for traders who hold leveraged Ethereum or Bitcoin positions, or for those who are shorting cryptocurrencies, however these fees are always subject to change.
How To Deposit and Withdraw
Another benefit of eToro is that there are multiple ways to deposit and withdraw funds. This allows you to pick the one that’s simplest and best for you. Remember that each method has different minimum deposit requirements. However, with options like bank wires, wire transfers, MasterCard, Visa, PayPal, Skrill and others, you’re sure to find the method which best meets your needs.
Keep in mind that in order to withdraw you must fill out a withdraw form. You must also include a copy of your signature, proof of address and color passport to receive your money via PayPal, bank transfer, credit card or debit card.
Buy CryptoCurrencies With A Credit Card
An additional innovative feature offered to eToro customers is the ability to buy cryptocurrencires direct from the eToro wallet using a credit card. Utilizing the third-party payment provider Simplex, eToro will allow its users to initiate payments via MasterCard and Visa. Buying cryptocurrency via your credit card on eToro is a simple 3 step process:
- Open your eToro Wallet
- Click the “BUY CRYPTO” tab and select the desired coin(s) as well as the amount you would like
- Fill out your payment information in the Simplex billing form to get your coins transferred to your eToro wallet
*Simplex may choose to immediately approve your payment request but sometimes they will decline and ask for further documentation/proof of identity. They may ask for a simple selfie picture and an additional form of official government issued documentation. There is also a fiat to cryptocurrency conversion fee of 1% for eTorox and 4% for Simplex.
Focusing On CryptoCurrency
eToro officially launched a cryptocurrency trading platform for those customers in the US this May, as well as a cryptocurrency wallet, and a mobile app which allows cryptocurrency purchases with credit card.
As mentioned earlier, this service was just recently made public in May. This enables US customers from more than 30 states and territories to trade many different cryptocurrencies. eToro also offers a multi-signature crypto wallet which supports six different cryptocurrencies (Bitcoin, Ethereum, Litecoin, Stellar, Bitcoin Cash, and Ripple) with more currencies ready to be added in the near future. eToro has also announced that their new cryptocurrency mobile wallet is available for both iOS and Android users. The eToro Wallet allows users to:
- Store and manage multiple cryptocurrencies
- Exchange any crypto for crypto
- Transfer cryptocurrency from their eToro accounts. However, this is only available with certain coins and for Gold accounts and above
Even though eToro focuses on instruments other than just cryptocurrency, they can be a very useful platform to trade cryptocurrencies on. At this time there are 13 cryptocurrencies supported, however, there are plans to add additional currencies soon. They also already support the most popular coins like Bitcoin, Ethereum and Litecoin which investors are most likely to trade anyway.
All of the unique features of eToro are what gives it an edge in this market, especially because of its unrivaled social trading capabilities and the simple and easy to operate user interface.
Whether you’re a seasoned professional or someone new to cryptocurrency trading, eToro can be a great place to make profits off of digital assets like cryptocurrenices. The social trading aspect of eToro makes them a truly unique place to trade and offers new and experienced traders access to trade decisions of highly successful professional traders for free.
If this platform and cryptocurrency social trading interests you, I encourage you to click the link below, signup and make a deposit to begin your journey towards financial freedom and digital asset exposure today. Also, make sure to read our other articles and stay up to date with all things cryptocurrency and finance by signing up for our email list.