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eToro Review 2021: Is eToro Legit & Worth it? (+Pros & Cons)

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Etoro Review

Etoro logo

eToro is one of the world’s most popular trading platforms which has opened its doors to the US market in 2018. This is unique in the trading industry because it not only allows you to trade but also provides a social trading platform.

Legit & Safe

Service Fees

Min Investment

Trading Assets

Pros

  • 15 cryptocurrencies that you can trade 24/7 – including major coins like Bitcoin, Ripple and Ethereum, but also minor ones like eos, Iota, Tron and Tezos.
  • Easy-to-use website and mobile app
  • Great community for cryptocurrency traders
  • Social trading that allowing you to copy successful traders’ portfolios

Cons

  • US customers are limited to only crypto trades while eToro has forex, CFD and stocks trading available in other countries
  • High sell fee – up to 5% charged when you sell cryptocurrencies

Best Investment Apps

Acorns

Acorns logo

$5 minimum account investment with $1 monthly fee

Invests spare change automatically

Earn up to 5% cash back with a rewards checking account

Stash

Stash logo

Start investing with as little as $5

Buy fractional shares of stocks in companies like Amazon or Apple

Only $1 monthly fee (for accounts under $5,000) or 0.25% annual fee for accounts over 5k

BlockFi

BlockFi logo

High yield (8.6%) on your cryptocurrency deposits

No min withdrawal requirements and no monthly fees

Gemini-insured wallets – $200 million in custody insurance

What is eToro & How Does eToro Work?


eToro is one of the world’s most popular trading platforms which has opened its doors to the US market in 2018.

This is unique in the trading industry because it not only allows you to trade but also provides a social trading platform.

But what is a social trading platform and how does it work?

Well, actually, trades on eToro are transparent, meaning you have access to other peoples’ trades, giving you an opportunity to leverage their experience.

But more on that later, let’s see what assets you can trade on eToro.

In General, eToro offers a range of trading assets, including forex, stocks, CFDs and cryptocurrencies to its European customers.

Currently, you as a US resident can only trade cryptocurrencies. However, eToro offers a large variety of cryptocurrencies to trade on.

Here’s the list of cryptocurrencies you can trade via eToro:

  • Bitcoin (BTC)
  • Bitcoin Cash (BCH)
  • Ethereum (ETHEREUM)
  • Ethereum Classic (ETC)
  • Litecoin (LTC)
  • Ripple (XRP)
  • Dash (DASH)
  • Stellar Lumens (XLM)
  • NEO (NEO)
  • EOS (EOS)
  • Cardano (ADA)
  • IOTA (MIOTA)
  • Zcash (ZEC)
  • TRON (TRX)
  • Tezos (XTZ)

Which US States is eToro Available in?


eToro Real Trading is currently available in following US states:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Jersey
  • New Mexico
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania, 
  • Rhode Island
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • Washington D.C.
  • West Virginia
  • Wisconsin
  • Wyoming
  • Northern Mariana Islands 
  • The United States Minor Outlying Islands

Is eToro Legit & Safe?


Yes, eToro is a legit company that is registered with the Financial Crimes Enforcement Network (FinCEN) as a Money Services Business (MSB). Plus, eToro is also approved by the state-level regulators.

But what does this all mean, you may ask. Let me break it down for you. Actually, regulators require financial companies like eToro to hold your funds in an FDIC-insured custodial account. 

FDIC stands for Federal Deposit Insurance Corporation, which insures your funds for up to $250,000. This means, if anything goes wrong with the company, even if eToro goes bankrupt, your money would still be protected and refunded to you.

eToro Minimum Investment


eToro lets you buy fractions of cryptocurrencies instead of whole units. That’s why you can start trading with as little as $25.

However, there is a $50 minimum for depositing funds into your account.

eToro Trading Hours


One of the best things about eToro is that it allows you to trade cryptocurrencies 24/7. This means, the cryptocurrency trading market is always open for you to trade.

eToro Features: What’s the Catch with eToro?


CopyTrader

eToro is well-known for its feature called CopyTrader. Basically, CopyTrader allows you to find other top-performing traders and copy all of their trades in just one click. Ultimately, when they trade, you trade automatically as well. And whatever outcome they get, you’ll get the exact same outcome as well.

Whether you’re a beginner or just don’t have time to watch the markets, copying experienced traders is a great option.

And what’s best about CopyTrader is that you’re not paying any extra fees for copying successful traders.

Not only you can copy others’ trades, but you can become a popular investor and enjoy additional monthly income while other people copy your trades.

The table below shows the requirements and how much you can earn when people copy your trades:

Source: eToro Popular Investor

Community

eToro provides a platform where you can join the leading community of crypto traders to connect and learn from them. Plus, you can check other investors’ portfolios, stats, risk scores and more. The platform also allows you to chat with traders to discuss strategies and benefit from their experience.

eToro Mobile App

eToro app is available on iOS and Android devices and offers everything that the web version does. The only drawback is that there are fewer analytical capabilities on mobile apps.

Education

In order for you to upgrade your skills and make informed decisions, eToro also provides basic trading education. Their educational content includes information about cryptocurrencies as well as news and analysis that help you with trading.

eToro Club

eToro Club offers you exclusive membership perks, including:

  • Dedicated account manager
  • Market newsletter
  • Quarterly market analyst report
  • Live streaming webinars
  • Trading signals platform
  • Priority customer service
  • The Wall Street Journal subscription

eToro Partner Program

Joining the eToro Partner Program you can earn money by promoting the world’s leading social investment network.

Once you sign up as an eToro Partner, the eToro affiliate manager will contact you to provide you information about the program and discuss your payment rate.

eToro Fees


eToro charges no commissions, no withdrawal fees (min. withdrawal amount: $30) and has no hidden fees. 

But eToro fees are entirely based on spreads.

A spread in trading is the difference between the buy (offer) and sell (bid) prices. And eToro charges a percentage of this difference that is added to your transaction when you trade.

Here’s the percentage you’ll be charged on each spread based on the cryptocurrency you trade:

CryptocurrencySpreads
Bitcoin (BTC)0.75%
Bitcoin Cash (BCH)1.90%
Ethereum (ETHEREUM)1.90%
Litecoin (LTC)1.90%
Ripple (XRP)2.45%
Dash (DASH)2.90%
Ethereum Classic (ETC)1.90%
Stellar Lumens (XLM)2.45%
NEO (NEO)1.90%
EOS (EOS)2.90%
Cardano (ADA)2.90%
IOTA (MIOTA)4.5%
Zcash (ZEC)3.5%
TRON (TRX)3.5%
Tezos (XTZ)5%
Binance Coin (BNB)2.45%

Note that the percentages listed above may vary a little based on market conditions. But you’ll be notified of the exact fee you’ll be charged before you make a transaction.

Let’s review a real-life example to better understand how the spread fees work. Imagine you’re trading Bitcoin. eToro charges 0.75% of the final price you sell your Bitcoin for.

So let’s say you’ve bought 1 Bitcoin for $40,000, a $300 fee (0.75% of $40,000) would be added to your transaction. 

Then, if the price of bitcoin increases to $45,000 and you’d like to sell it, only a $15 fee will be added to your sale. Here’s why: the 0.75% fee applies to the final price, which in this example is $42,000. 0.75% of $42,000 is $315. And because you’ve already paid $300 when you bought the Bitcoin, you only have to pay the remaining $15 when you sell.

Price adjustment like this may be beneficial for you as well. For example, if the price of Bitcoin drops and you decide to sell it, the spread will be calculated and you’ll receive the excess fee you’ve already paid as a refund.

How to Start Trading with eToro? A Step-by-Step Guide


Step 1 – Open an eToro Account

In order to start trading with eToro first you need to open your account

The sign-up process is simple and requires personal information about you. Make sure you provide the correct information as you’ll need to verify your identity after you complete your initial application.

You can verify your identity using valid (unexpired) documents like:

  • US passport 
  • Driver’s license
  • State ID

Step 2 – Test Your Skills

After your account is approved and you’re logged in, you’ll get access to a $100,000 virtual portfolio to practice trading and upgrade your skills.

Note that the process of trading with virtual money is just like trading with real funds.

Here’s the step-by-step guide to how to trade:

  1. Search for the crypto which you’d like to buy
  2. Click on “Trade”
  3. Insert your desired investment amount
  4. Click on “Open Trade”

Step 3 – Start Trading

Once you’ve practiced your skills and feel ready to dive into real trading, just follow the same steps you took when you were practicing your trading skills. But this time, you’ll be depositing real money.

eToro Pros & Cons


Pros

  • 15 cryptocurrencies that you can trade 24/7 – including major coins like Bitcoin, Ripple and Ethereum, but also minor ones like eos, Iota, Tron and Tezos.
  • Easy-to-use website and mobile app
  • Great community for cryptocurrency traders
  • Social trading that allows you to copy successful traders’ portfolios

Cons

  • US customers are limited to only crypto trades while eToro has forex, CFD and stocks trading available in other countries
  • High sell fee – up to 5% charged when you sell cryptocurrencies

eToro Alternatives


Let’s take a look at top eToro competitors and see how they compare:

eToro vs Robinhood

Robinhood Summary

  • Free trading
  • No minimum deposit
  • Access cryptocurrencies
  • Get stock news alerts

Robinhood is one of the largest trading platforms in the United States and the biggest alternative to eToro. However, unlike eToro, Robinhood doesn’t provide a copy trading feature. Plus, Robinhood is focused on stock trading, while eToro only offers cryptocurrency trading to US residents.

eToro vs ZuluTrade

Just like eToro, ZuluTrade is a social trading platform allowing you to directly follow other traders and copy their trades. However, ZuluTrade cannot control the trader signals only letting you open one trade at a time. If you copy traders with many open positions, your results will significantly differ from the investor who you’re copying. Plus, ZuluTrade offers forex trading and lets you trade with Forex.com and FXCM.

eToro vs Fidelity

While eToro is best known for its social trading feature, Fidelity is an ordinary brokerage. Fidelity offers multiple trading instruments like stocks, CFDs and options, whereas eToro only offers cryptocurrency trading to US residents.

Verdict: Is eToro Worth it?


Are you still wondering if you can make money with eToro?

Whether you’re a beginner trader, who’s interested in cryptocurrency trading or an experienced one, you can profit from eToro social trading. Weighing the pros and cons, it’s more likely that you’ll benefit from using the platform and all the features eToro offers than regret it.

However, even though trading with eToro sounds easy, don’t expect to get rich overnight.

Pro tip: invite your friends to join eToro so you can both receive a $50 reward when your friend makes a trade of at least $100. The more friends you refer, the more you’ll earn.

eToro FAQ


Is eToro Good for Beginners?

eToro is well suited for beginners as they provide education and the feature to copy successful traders’ portfolios.

Can You Earn with eToro CopyTrading?

Yes, it’s completely possible to profit from CopyTrading. But you’ll need to make your own due diligence and research traders before you decide to copy them.

Do You Pay Tax on eToro?

Earnings you’ll get from eToro is your income. So you are responsible for calculating and reporting tax to your state of residence. You can use information from your account statement to calculate the taxable income that you may need to include in your tax return.


eToro

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