eToro Review

eToro Review

Many people recognize eToro from Alec Baldwin’s ads on YouTube. Celebrity endorsements carry some weight in consumers’ opinions about a service, but does that mean that eToro is the right broker for you? Cyrptocointrace experts have fully evaluated eToro and have published our conclusions. Should you use eToro’s trading services? Find out by reading this broker review.

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Year Founded

2007

Minimum Deposit

$50 in US and Australia, $1,000 most other countries

Regulation

FCA, CySec, ASIC

Products Offered

15 cryptocurrencies for US clients non-US 16 currency pairs, 2,000 assets

Product Types

Outside of the US: Forex,indices, stocks, bonds, cryptocurrency, CFDs, ETFs, commodities in the US–crypto only

About eToro

eToro was founded in 2007 and is based in the United Kingdom. It has first-tier licenses from the FCA and ASIC and one from CySec. While many brokers who focus on CFDs do not accept US clients because of regulatory issues with CFDs, eToro accepts clients from the US for cryptocurrencies. This broker has a variety of trading instruments and platforms to choose from.

Regulation

The most important criterion for choosing any broker is regulation. This is eToro’s strong point because it has licenses from top-tier regulators such as FCA and ASIC and from second-tier regulated CySec. These licenses definitely satisfy the requirement of working with a regulated broker. The reason regulation is essential is that it provides oversight. If you work with an unregulated broker, the risks are higher that it will be a scam broker, because legitimate brokers usually care about having licenses and do not mind oversight if everything they are doing is above board. Also, having a license isn’t the only thing that matters, but the type of license is also important. Even a broker with a license can get away with unscrupulous activities pretty easily if it is a third or fourth-tier license. Low-quality regulators don’t seem to pay much attention after they issue a license. However, the FCA, ASIC, and CySec will respond to customer complaints and if necessary take disciplinary action.

Fees, Commissions, Spreads, and Account Types

The types of eToro accounts, rules, and pay structure vary according to region. U.S. and Australian clients can open an account for as little as $50, whereas the minimum in most other countries is $1,000. eToro makes money on non-US accounts through spreads, whereas US clients pay a commission between 0.75% to 5% on cryptocurrency trading. eToro charges reasonable fees for currency conversion, inactivity for 12 months. U.S. traders do not pay a withdrawal fee but the minimum to release funds is $30. Outside of the U.S, there is a withdrawal fee of $5.

Trading Platforms

eToro clients use eToro’s platform which is user-friendly and contains many special features such as facilitated copy trading and cryptocurrency trading features. eToro does not offer the popular MetaTrader 4 and 5, but the eToro platform is sufficient for most traders as long as they do not need automated trading. In addition, eToro offers a variety of tools and mobile apps. U.S traders can activate a stop-loss position to minimize losses.

Trading Instruments

As with accounts, the trading products vary according to region. U.S. clients can trade cryptocurrencies. Non-US traders have a choice of 2,000 stocks and ETFs from 16 countries traded through CFDs and 16 currency pairs for forex trading. U.S. clients have a choice of 15 cryptocurrencies. The limitation of what US clients can trade may seem like a drawback until you consider that many of eToro’s competitors offer no services for U.S. traders. This is because many of these brokers trade stocks, commodities, ETFs, and indices through CFDs. These CFDs are contracts for difference are not allowed in the US because of SEC restrictions. The stated reason for this restriction is the SEC does not feel CFDs are safe because they are not traded through a centralized regulated exchange. It is true that CFDs are risky and many first-time CFD traders lose money, but it is possible to make money on CFDs with the right broker.

Education and Research

The one area eToro trails its competitors is in research, but it offers enough for most of its clients. There is an earnings calendar, fundamental analysis tools incorporated into its platform, sentiment data, and a Twitter-style market news feed. Its educational materials are sufficient and there are webinars, a trading school, and integrated educational content. The necessity of these education and research features depends on the trader. Many seasoned traders may already have resources that like to use, whereas novice traders may need more instruction and information. The importance of this criterion depends on the individual trader.

Pros and Cons of eToro

Pros

  • Cryptocurrency and copy trading tools
  • Tier one licenses
  • Convenient mobile trading tools

Cons

  • High minimum deposit for non-US traders–some of the spreads are high
  • Not the best research materials
  • No MetaTrader or automatetd trading

Our Conclusions About eToro

CryptoCointrace has done a thorough investigation of eToro’s services, and we have concluded that eToro is a legitimate, well-regulated broker with a variety of cryptocurrency trading choices for US traders and CFDs for non-US traders. eToro offers social trading, although traders who insist on automated trading may have to look elsewhere. While it is likely that your money will be safe with eToro, that doesn’t mean that there won’t be losses due to the risk involved in the type of trading. Also, even with the best brokers, there may be a need to file a complaint due to a dispute.

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