The cryptocurrency exchange eToro prides itself to be a market leader in social trading. With a reputation of aggressive marketing, eToro rides of the promise that: Without a lot of background knowledge, traders should be able to make high profits within a short time.
Behind the often lurid advertising is an established multi-asset broker platform with more than ten million users. Without a doubt, eToro is one of the largest exchanges for cryptocurrencies of our time.
Go on with this extensive guide about eToro from the Bitcoin Guide Africa.
Broker history of eToro
EToro was founded in 2007 in Israel, Tel Aviv by 2 brothers Yoni and Ronen Assia. Initially, it was a broker cryptocurrency which users could trade with using contracts for difference. In 2010, the broker introduced a concept that would make it successful: copy trading.
With copy trading, users can view other traders' portfolios and copy their strategies. Since then, the company has focused on the social aspects of trading. The platform becomes a network where users can learn from professionals.
The success at eToro Trading
There were extensive rounds of funding between 2007 and 2014, with the company raising more than $ 58 million. In December 2014, the exchange offered trading in Bitcoin CFDs for the first time. Other cryptocurrencies followed.
In 2018, eToro finally became possible to buy and sell cryptocurrencies in a normal trading. With its success acquiring a larger market share, the exchange has since increased with blockchain technology. In December, eToroX was founded, a subsidiary for the storage and transfer of distributed ledger technology activities.
In 2019, eToro acquired blockchain company Firmo to develop tokenized assets, as well as Delta, a company focused on crypto portfolio tracking. The broker also developed Lira, an open source programming language for financial contracts.
The Assia brothers saw an opportunity to bridge the gap of inequality in wealth distribution across nations by using Etoro. To this end, the company founded the Gooddollar Research Institute, which aims to develop a universal basic income based on blockchain technology.
Today, over 10 million people from over 140 countries have registered and benefited on the platform. With its head office in Europe, eToro gives people from the developing world an equal opportunity access to the global market through a broker.
What can you trade on eToro?
The broker is a multi-asset broker with a wide range of shares, contracts for difference, commodities, ETFs, foreign exchange, indices and even cryptocurrencies which can be traded on eToro.
The broker currently offers the following cryptocurrencies:
- Bitcoin cash
- Ethereum Classic
- Stellar Lumens
- Binance coin
This means that the selection of cryptocurrencies is relatively large. There are other exchanges with a lot more altcoins, but many of them cannot be bought directly with fiat currencies. If you are only targeting the big coins and tokens, you will probably find everything which is worth investing in.
These cryptocurrencies can be bought with various fiat currencies such as Euros, US dollars or the British pounds. In addition, it is possible to exchange cryptocurrencies with other cryptocurrencies.
Is the broker at eToro trustworthy?
Based in Cyprus, the island is popular as the main property on many trading platforms. The broker is thus regulated by the Cyprus Securities & Exchange Commission (CySEC).
Trading with the broker at eToro is therefore subject to European jurisdiction because the Cypriot financial regulator enforces European law.
For a positive eToro experience, consider a copy-stop-loss function. This feature limits the maximum losses during trading. As soon as the limit is reached, the trade is closed immediately.
The website is protected by SSL encryption. This makes it difficult for hackers to crack the website. The provider also promises to only save the data of its customers that affect the opening and closing of trades.
CFD trading at eToro
Users can also trade crypto CFDs on eToro. These are contracts for difference where the trader does not really own the cryptocurrency. Instead, he only borrows it for a short time, speculating on the course development.
Trading in contracts for difference is one of the advanced trading instruments. The trader holds the cryptocurrency for a certain period of time and benefits from the price development. If he has speculated correctly, then he can keep the returns.
CFD trading also entails many risks. If he speculates, then he has to answer for the losses. Leverage can be used in CFD trading. This lever can be used to multiply the possible profits or losses.
With a leverage of 1:10, they increase the possible profits, but also losses tenfold. For this reason, leveraging is only for professionals.
Getting an eToro wallet
The broker offers its own wallet, the eToro wallet. It is therefore not necessary to withdraw the purchased cryptocurrencies from the platform straight away. The wallet is available as an eToro app for Android and iOS.
Features of the wallet include storing crypto assets and sending the cryptocurrencies from the wallet to other wallets. It can also be used to receive cryptocurrencies.
To send your own cryptocurrencies, for example to keep them on another wallet, click on "Account balance" and then on "Send". Here you either enter the address of the wallet or you scan the QR code using the eToro app.
Another useful feature of the wallet is being able to exchange cryptocurrencies for other cryptocurrencies. This is possible with the "Exchange" option. You can only exchange cryptocurrencies which the broker supports.
Social Trading at eToro
As a pioneer in the cryptocurrency stock exchange, one of the most outstanding features of the eToro broker is social trading. There are now other brokers who also offer this type of trading.
The portfolios of other traders can be copied via social trading. Under the menu item "People" you can see everyone who has released their portfolio for copying. The search can be narrowed down according to certain criteria. At the same time, the search shows you the average profits and losses of the trader. The risk of the portfolio is also classified.
With just one click, the portfolio is copied and you decide how much you want to invest. The copied portfolio can also be adjusted and changed. The trades can be canceled at any time.
Social trading offers orientation especially for newbies in the cryptocurrency stock trading with the ability to minimize risks. With social trading you also get an insight into the strategies of experienced traders and can therefore learn a lot.
The social is one of the positive eToro experiences and is capitalized on the platform. Traders can exchange information and develop trading strategies together. You also have the chance to get in touch with professional traders and get advice from them.
How do you open an eToro account?
To register on the platform, you must first log in to eToro. On the website you will find the menu item "Register". Here you only need to enter a user name and a password.
This completes the opening of an eToro account. Newcomers on eToro have access to the demo account and can familiarize themselves with the website and its functions. Opening the eToro account is also free of charge.
However, you cannot withdraw money with it yet. To do this, the account must first be verified. For verification, you first carry out the eToro login and then proceed to your own account.
Proof of identity and address are required for verification. The proof of identity must contain the name, the date of birth and a date of issue and expiry. In addition, a clear photo must be available. For example, the passport is a good choice for proof of identity.
A copy of the proof of identity will be uploaded to the website for verification. Then it's the proof of address. With this proof, the name, address and date of issue must be clearly recognizable. Proof of address must not be older than 6 months.
When both pieces of evidence have been uploaded, the eToro broker checks the information. This can take a few days. As soon as the eToro account is verified, you will be notified.
Next, after account verification, you will fill in the economic profile. With the economic profile, the provider only wants to know how much experience you already have with trading and which investments you are interested in.
How do you deposit money at your eToro account?
Before trading starts, you have to make a deposit. To do this, go to "Deposit money" and select the amount. Then the deposit guidelines follows. The deposit options are numerous and are as follows
- Credit card
- Rapid transfer
- bank transfer
- online banking
- to disposal.
A special feature of the broker is that the provider allows the purchase of cryptocurrencies with PayPal. Most exchanges do not accept PayPal as a method of payment. In order to start trading at all, a minimum deposit of $ 200 is required.
How do I buy and sell bitcoins using eToro?
To start trading, first click on "Markets" on eToro. Under “Markets” you will find a wide variety of trading products, such as stocks, raw materials, indices and cryptocurrencies. Then click on "Crypto" to trade with Bitcoin and Co.
You can either Buy or Sell to start trading. Select the amount of coins or tokens you want to start trading with.
How does the eToro payout work?
Payouts on eToro can be made at any time. For a successful payout, go to your account and then to the "Withdraw" tab. The minimum amount for eToro withdrawal is $ 30. The account must also be verified.
Withdrawals are made either by credit card, PayPal or bank transfer. By default, the provider pays the money out in the same way that it was deposited.
How much are the fees at eToro?
Deposits via the various payment methods are free of charge. However, eToro charges fees on the payment from the account. There is a fee charge of $ 5.
The eToro fees on stock trading are called "Spread". How high the spread at eToro is depends on the cryptocurrency traded. Spreads range from 0.75% to 3% or 4%. Bitcoin has a fee of 0.75%, while Binance Coin (BNB) has a fee of 2.45%.
The spreads are variable. The fees just mentioned may change depending on the market situation. This is due to the volatility of the cryptocurrencies. The spreads are the minimum possible eToro fees and ultimately only a guideline. Compared to other exchanges, the fees for crypto trading are relatively high.
In addition, there are overnight fees for contracts for differences that are held over a longer period of time. If you leave your account dormant for more than 12 months, you also have to pay an inactivity fee of EUR 10 per month.
Customer user friendliness at eToro
The broker's website presents itself with a clear, simple design. The website itself is available in English.
eToro Customer Contact and Support
Newbies at eToro and those with experience in the stock trading can raise questions with the customer support for a user friendly experience in the cryptocurrencies stock trading. With the option of telephone support not currently available, users can raise a support ticket instead.
Alternatively, the eToro contact can be established via a live chat. The live chat is has support for users around the clock on working days. Only registered and verified users can use live chat.
Stock Trading with eToro App
One of the many benefits a professional eToro broker is that there is also an eToro app. The app is available for both iOS and Android stock traders. The app enables a full program of social trading and has all the trading instruments that are also available with the browser version of the broker.
The trading app is adapted to the dimensions of the smartphone screen without losing an overview. Trading cryptocurrencies, CFDs, ETFs, stocks, etc. works on the app as well as on the website.
Training opportunities and demo account
The eToro Trading Academy is one of the positive experiences of stock trading. Here the broker offers its users a variety of training opportunities for newbies and advanced users. Live webinars, e-courses and trading videos are available to learners.
If you want to try it out first and get to know the functions, you can use the demo account. With the demo account, you speculate with virtual money. However, the trades correspond to the real market. This allows you to learn how to trade without risking real money.
Why you should start stock trading on eToro
It is not for nothing that the eToro cryptocurrency exchange is one of the most popular exchanges worldwide. Social trading, bridging the gap between the inequality in the stock market has been instrumental in shaping the world of crypotocurrency using eToro.