Trading Bitcoin On eToro

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Trading Bitcoin On eToro

Bitcoin is the world’s leading cryptocurrency, with a market cap of over $134 billion and a daily trading volume averaging $21 billion. Millions of people around the world want to get their hands on the first and largest cryptographic currency, but choosing the right place can be tricky. The web has thousands of cryptocurrency exchanges and platforms available, and whilst only a small number is reputable and trustworthy, the choice is still significant.

Why Choose eToro?

eToro is, for several reasons, one of the best Bitcoin trading platforms on the market. Available in most countries, the regulated and reputable cryptocurrency broker offers a selection of tools and services, catering to both novice and experienced traders. Apart from Bitcoin, Ethereum, and many other cryptocurrencies, investors can also use eToro to trade shares, commodities, forex, and several other markets.

One single platform allows you to manage and oversee an entirely diversified investment portfolio, which you can access both on your desktop computer and mobile device.

When trading Bitcoin, eToro offers you a variety of investment options. Apart from directly purchasing the coin, you can opt to invest in Bitcoin Cross Markets or Bitcoin Contracts for Difference (CFDs). These financial instruments are explained further on in this guide, but in essence, they allow you to benefit from BTC price movements without needing to purchase the digital token.

Due to its suite of services, eToro is considered to be one of the most forward-thinking trading platform available. Although it is based in Israel, the company has licenced subsidiaries across the globe, including in Cyprus and the UK. These are only a few reasons to choose eToro and you can find many more in our detailed eToro review.

75% of retail investor accounts lose money when trading CFDs with this provider

CopyTrading Bitcoin

Whether you’re a new Bitcoin investor with limited experience or a seasoned investor with limited time, eToro offers a unique solution which you’re likely to be interested in. CopyTrading is eToro’s name for its social trading platform, which allows you to automatically copy trades of successful Bitcoin investors.

By using the CopyTrading platform, your capital is invested alongside that of the investor or investors of your choice. Whenever they open or close a trade, your account automatically does the same. eToro gives you access to thousands of traders and several useful tools to find the ones which match your investment and risk strategies.

In order to use CopyTrader on eToro, all you need to do is follow these steps:

  • Step 1 – Select the Cryptocurrency market using the top navigation bar
CopyTrading Bitcoin on eToro
Screenshots are shown for illustration purposes only. Actual product may vary.
  • Step 2 – Click on the Copy People button at the bottom left-hand side of the page
CopyTrader on Etoro
Screenshots are shown for illustration purposes only. Actual product may vary.
  • Step 3 – Use the filters at the top of the page to narrow down the search to Bitcoin traders who match your preferences
CopyTrader on eToro
Screenshots are shown for illustration purposes only. Actual product may vary.

When using the CopyTrader function on eToro you need to keep in mind the following conditions:

  • There is a minimum limit of $200 and a maximum limit of $2,000,000 per trader
  • The maximum number of traders you can copy at any one time is 100

By default, eToro always displays the most successful traders first. At the time of writing, the top 3 cryptocurrency users were:

  1. JeppeKirkBonde
  2. DavidePerina
  3. harshsmith

Normally, traders with the highest returns are also those with the highest risk factors. eToro’s intuitive filter options allow you to choose safer traders if you are seeking these. You can also choose the most successful traders based on an average percentage return.

Bitcoin Cross Markets

A popular trading option available on eToro is investing in Bitcoin cross markets. In order to access these investments, all you need to do is:

  • Step 1 – On eToro’s front page click on All Markets using the main navigation bar
eToro Bitcoin Cross Markets
Screenshots are shown for illustration purposes only. Actual product may vary.
  • Step 2 – Select Crypto using the navigation bar at the top of the screen
eToro Bitcoin Cross Markets
Screenshots are shown for illustration purposes only. Actual product may vary.
  • Step 3 – Below the number of search results you will see two drop-down menus;
    1. Leave the first one Crypto
    2. Click on the second to select between Commodity Crosses, Crypto Crosses, and Currency Crosses
eToro Bitcoin Cross Markets
Screenshots are shown for illustration purposes only. Actual product may vary.

eToro gives you access to one of the largest choices of Bitcoin cross markets. Apart from the more common ETC/BTC, BTC/EUR, BTC/GBP, and BTC/XLM, you will also be able to invest in less popular options, including Gold/BTC, and BTC/EOS.

75% of retail investor accounts lose money when trading CFDs with this provider

Buy and Hold

One of the most common ways to invest in Bitcoin is also the simplest. eToro allows you to purchase the digital token directly and store it in a free, in-built wallet. Using the HODL strategy, many investors choose to buy Bitcoin and hold it, expecting its price to rise in the future, where they can sell it for a profit. This strategy is best used by those who don’t have the time to monitor every Bitcoin price movement. Instead, they wait until the price has risen significantly before selling their crypto asset.

eToro allows you to open long Bitcoin positions necessary for Hodling without incurring any additional fees. All you need to do to buy Bitcoin is select the buy button on the currency’s ticker. The platform allows you to set two important risk-mitigating options:

eToro Bitcoin Ticker
Screenshots are shown for illustration purposes only. Actual product may vary.
  • Take Profit – where your position is automatically closed once you have reached a pre-determined profit margin
  • Stop Loss – where your position is automatically closed as a result of a drop in BTC’s price below a pre-determined threshold
  • Sell – where your position is automatically closed as a result of the BTC price reaching a pre-determined value

Using at least one of these options is highly recommended since it safeguards the majority of your capital against substantial losses.

If you’re not happy with the current price of Bitcoin, you can set a buy order which will purchase the cryptocurrency only if and when it reaches your desired value. Using the buy order is especially useful for trend traders who have studied the market and are foreseeing an increase or decrease in price.

Shorting & Longing Bitcoin

Shorting Bitcoin is a more advanced investment strategy which is used when an investor believes that the price of Bitcoin will drop in the near future. Not suitable for novice traders due to the increased risk involved, shorting selling Bitcoin can be easily performed on eToro by simply clicking the sell button instead of the buy button on the BTC ticker.

Longing Bitcoin is, in essence, the same strategy as Hodling, and involves investors buying Bitcoin for the long-term, expecting a return when they sell the asset as a result of an increase in its price.

Practice Makes Perfect

Establishing a successful and profitable investment strategy is not easy, and requires significant time and effort. Apart from the need to access up to date cryptocurrency news and useful investment guides, you need a platform which allows you to test different strategies without risking any of your money. eToro’s demo account is designed to do just that.

Giving you access to $100,000 in virtual cash, eToro’s demo account is the ideal platform to use, since it behaves exactly like the real thing. This account gives you access to all markets and assets, providing you with an accurate understanding of your trading abilities and the success of your strategies. In addition, the demo account also lets you use the CopyTrader platform, making it the closest you will ever get to investing without the risk of losing your capital.

To help you develop your strategy, eToro offers you detailed charting and historical information for every asset class and market. The platform also offers a convenient Help Center which includes instructions and links to perform practically all tasks and functions.

75% of retail investor accounts lose money when trading CFDs with this provider

Regular Asset Trading vs Bitcoin CFD Trading

Whilst most traders would be familiar with regular asset trading, Bitcoin CFD trading might be more of a mystery, especially to novice users. When purchasing Bitcoin CFDs you are essentially buying a contract with a pre-determined sale price and execution date. Depending on the cryptocurrency’s price movements, this contract can gain or lose value, allowing you to buy or sell it for a profit.

When purchasing Bitcoin CFDs you are only purchasing the contract, not the underlying asset. This means that you do not need to concern yourself with securely storing and transferring the token, nor do you need to worry about remembering and protecting your wallet’s private key. Bitcoin CFD trading is a simpler and more efficient way to invest in the cryptocurrency as is often cheaper than regular asset trading.

Bitcoin CFD trading is a higher risk investment which means that you are more likely to lose some or all of your investment capital. You should only invest in this financial instrument if you fully understand the risks and can afford any potential losses. Trading Bitcoin CFDs is banned in certain countries, including the United States of America. Certain restrictions may also apply to users from other jurisdictions.

Leveraged Trading & Associated Fees

eToro Bitcoin Fees
Screenshots are shown for illustration purposes only. Actual product may vary.

A sought-after investment feature preferred by serial investors is leverage trading. Available on eToro, trading using leverage involves borrowing money in order to magnify your investment capital, allowing you to open larger positions and generate a higher profit. When trading on leverage or margin, you can place a high-value trade without needing to deposit all the funds upfront. 

When trading Bitcoin, eToro offers maximum leverage of 1:2. Since this leverage is a loan, it is repayable when your position is closed. Understanding the basics of margin trading is essential before you start leverage trading since this feature exposes your investment capital to increased risk.

eToro’s fees are known to be transparent and straightforward. In the case of trading Bitcoin, the platform charges a spread percentage whenever a position is opened or closed. Bitcoin’s spread on eToro is 0.75%. Like most platforms, eToro charge overnight fees if you keep certain trades, such as Bitcoin CFDs open beyond a certain time. These fees vary by asset and market, but in Bitcoin’s case, these are currently -3.019691.

Before investing in Bitcoin on eToro it is a good idea to get acquainted with the platform’s fee structure

75% of retail investor accounts lose money when trading CFDs with this provider

Withdrawing Your Bitcoin From eToro

At the moment, withdrawing your Bitcoin from eToro is not possible, and you would first need to liquidate your cryptocurrency in order to get hold of your funds. The platform’s currency is USD, and all withdrawals made to a non-USD account are charged applicable conversion fees. A similar fee is also levied on non-USD deposits.

Minimum withdrawal values are $50 and a $25 withdrawal fee is applied to every transaction. It, therefore, makes sense to group withdrawals up before effecting the transaction in order to save on fees.

Overall Verdict

Trading Bitcoin on eToro is a pleasant and rewarding experience, suitable to both novice and experienced traders. Over the years, the platform has invested heavily in user experience and security, making it one of the most respectable and acclaimed trading platforms in the industry.

Supporting these global operations are a team of skilled and helpful customer service agents, who are able to provide guidance to any issues users may have. 

eToro’s most significant feature is the sheer choice of Bitcoin trading options. You can choose to trade the cryptocurrency directly or indirectly, via, for example, Bitcoin CFDs and decide whether to carry out your own investments or use the CopyTrader platform instead. At any point in your investment journey, eToro supports you with extensive educational material, charts, and historical information. You can also make use of the realistic demo account which is automatically available to all registered users. 

For its services, the platform charges competitive and transparent fees which make calculating potential returns easy. The platform does not charge any commission fees, and accepts one of the widest choices of deposit methods, which include PayPal.

All of these convenient features and tools make eToro one of the best Bitcoin trading platforms in the world.

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