Established in 2007, eToro is an online trading platform founded by brothers, Yoni Assia and Ronen Assia along with David Ring. Previously known as RetailFX, eToro has emerged as a pioneer online broker for social trading.
Interestingly enough, eToro is not listed on any exchange nor do they have a bank parent. They also don’t disclose their annual report on their site. However, it is one of the 5 best trading platforms for Europeans. In the UK, eToro trading platform is regulated by FCA regulatory authority.
eToro released its OpenBook social platform, with a unique ‘Copy-trading’ feature in 2010. The OpenBook allows investors to view, follow and mimic the network’s existing top traders automatically in real-time. This feature made the market accessible to everyone, irrespective of their experience. The platform created a user-friendly environment and allowed beginner traders to copy trade strategies of other traders easily and automatically. It basically works as a ‘Black-box’ system, where the copycat does not really understand the logic and rationale which could lead to huge potential losses.
eToro launched its mobile app in 2013 for both iOS and Android and thus expanded its reach, in 2015 it included CopyFunds to its existing offerings, By 2017 eToro trading platform again began to expand its market reach and entered the world of cryptocurrency and added crypto trading to its platform. Thus over a period of time the product offerings have been expended to include other trading assets such as cryptocurrencies, stocks, and commodities.
How is eToro different from other trading platforms?
The platform offers a range of investment and trading options. Users can use the same platform to trade in cryptocurrency and other traditional assets.
Other than this, their CopyFunds feature, with its ability to benefit new investors through predetermined strategies of other top traders makes it a popular choice and also sets them apart from other platforms.
Once you register on the platform, eToro gives its users $100,000 virtual money, this helps them to figure out their investment skills and strategies before they begin investing real money.
The platform also has other tools such as an ‘economic calendar’ where the investor can simply log in the dates, time zones and the assets they want to trade. The calendar then publishes a report on how the events are likely to have an impact on those assets.
CFDs and its impact on Cryptocurrency Trading on eToro
A CFD, Contact for a difference is a kind of derivative trading, it allows the investors to predict and speculate the rise or fall of global financial markets. CFD trading does not allow buying or selling of the asset, i.e. cryptocurrency instead based on your prediction- you buy or sell units for an instrument. When the instrument moves in your favor, it generates multiples of CFD units that you already sold or bought. It is important to be cautious as it’s possible for losses to exceed deposits.
In 2013, eToro entered the world of cryptocurrency by offering CFDs for Bitcoin. CFD still plays an important role in eToro as many trades of cryptocurrency are CFDs instead of the actual assets.
eToro lets you do autonomous retail trading in cryptocurrency, stocks, commodities, and ETF. You can follow other traders and copy them with one click. You can automatically replicate the trades of other traders, this is also known as Copy Trading.
While its feature of Social Trading allows you to share information on trades and other investments with the community. eToro has the option of investing in CopyPortfolios, which is a common investment fund based on the concept of copy trading.
All traders have an open public profile, which can be viewed by anyone. Anyone can follow anyone and all trades can be replicated.
To participate in CopyTrading you need $5000 to make an investment in CopyFunds. In the case of cryptocurrency and commodities the minimum trade size is $200 while for stocks and EFTs it is $500, for commodities, it is $2,500 and for Forex and indices, it is $5,000.
To sum up,
Users and reviewers of the platform find it easy to use, even those with no trading experience can easily get the information they need and make trades. The platform is easily accessible on PCs as well as Android or iOS devices. From the multiple deposit methods available on eToro, choose the one that best meets your need. Withdrawal is also very easy all you need to do is fill out a form, you can receive money via a bank transfer, credit/debit card or PayPal.
While there are no regulations for cryptocurrencies, eToro trading platform adheres to all the guidelines of FCA and CySEC. eToro is a highly intuitive platform that will surely appeal to anyone who wants to invest.