Trading Ethereum On eToro

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Trading Ethereum On eToro

eToro is one of the largest online trading platforms in the world, supporting a variety of markets and financial instruments. Along with a useful trading app and one of the most comprehensive lists of payment methods, the platform gives you access to buy and trade numerous cryptocurrencies, amongst which Ether, more commonly known as Ethereum.

This guide will provide you with all the information you need about trading Ethereum on eToro.

Why Choose eToro?

When trading Ethereum with eToro you can choose between two primary methods. If you are looking to own the cryptocurrency then you can purchase it directly and store it directly on the platform’s in-built wallet. This service is very similar to that offered by the most reputable Ethereum exchanges.

The second purchasing method is to invest in cryptocurrencies by trading Ethereum Contracts for Difference (CFDs). This financial instrument allows you to benefit from price movements of a particular asset without directly owning the asset. In addition, eToro allows you to trade with leverage, which means that you can open positions twice the size of your capital.

Whilst eToro is not the only trading platform offering Ethereum CFDs, it includes the social (or copy) trading platform. This convenient tool is ideal for traders who lack the experience or time to carry out trades, by allowing them to automatically copy trades of successful traders. The social trading platform allows you to view the portfolios of the platform’s best investors and invest your capital according to their trades, all in real-time.

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

CopyTrading Ethereum

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

CopyTrader is the name eToro gives to its social trading platform, allowing it to offer a unique tool which makes it stand out from a crowded market. Whilst it is primarily used by beginner traders, this platform is also useful for experienced traders who just don’t have the time to carry out trend trading and other investment strategies. Instead, they rely on, and benefit, from the time and skills of other investors.

Accessing the CopyTrader page is very easy, with a link on the left-hand side of the market screen. Once there you can filter your choices according to your investment criteria. Options include:

  • Markets (Crypto, Forex, Commodities, etc.)
  • Minimum overall profit
  • Period (months) within which profit was generated
  • Risk score
  • Number of active trades

eToro automatically posts the most successful traders first, but keep an eye out for their risk score. Normally, the more successful a trader is the higher the risk score. You must always be prepared to lose some or all of your investment capital when copying high-risk investors.

Currently, the top 3 crypto-traders which you can copy on eToro are:

  1. JeppeKirkBlonde
  2. DavidePerina
  3. harshsmith

Before choosing to copy any trader on eToro you can view their profile, which provides you with information about their track record, their experience, and their current trades. Very often you will find that these investors diversify their portfolio across markets, lowering the overall risk of their investment.

Ethereum Cross Markets

eToro Cross Markets
Screenshots are shown for illustration purposes only. Actual product may vary.

The investment opportunities involving Ethereum and offered by eToro include a variety of cross markets. The platform supports two primary cross markets, namely Crypto and Fiat Currency crosses. Commodity crosses have also been introduced, but these are currently limited to Bitcoin, not Ethereum.

Investing in Ethereum cross markets on eToro is very simple. All you need to do is:

  1. Click on the Trade Markets link on the left-hand side of the screen
  2. Select Crypto markets from the menu at the top
  3. Below the search results total you will find two drop-down menus, one is labelled Crypto, which you should leave as is, whilst the other is labelled Coins by default
  4. If you would like to change the cross markets to Crypto, Currencies, or Commodities, you can do this by changing the option on the second drop-down menu
  5. The options available are presented below these drop-down menus, and executing a trade with any of them is as easy as clicking on the Buy or Sell buttons on each ticker

Ethereum cross markets include several options, including ETH/EOS, ETH/BTC, and ETH/XLM. Before processing any trade on eToro you get the opportunity to set Stop Loss and Take Profit options, which minimise your risk when you are not able to constantly monitor your investment’s progress.

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

Buy and Hold

There are several different strategies which you can adopt in order to trade Ethereum effectively on eToro. One of the most popular methods is known as HODL, and although the term was originally coined for Bitcoin it works across the cryptocurrency market. This strategy involves buying Ethereum coins and keeping them for the long term, expecting a sizeable return following a sudden price hike or general increasing trend.

When using the HODL strategy on eToro you benefit from lower fees since you are not charged overnight or leverage charges. The Ethereum coins are securely stored in your platform wallet and you can keep hold of them for as long as you wish. This strategy is only suitable when buying crypto assets directly and is not ideal for Ethereum CFDs. 

Shorting & Longing Ethereum

eToro Shorting and Longing
Screenshots are shown for illustration purposes only. Actual product may vary.

Two of the most popular investment strategies on eToro are shorting and longing. You would normally short sell Ethereum because you believe that its price will decrease by the time you come to close your position. On the other hand, longing is the more traditional strategy, where you buy low and sell high. If you are planning to short or long Ethereum on eToro you should focus on CFDs, since these are the best financial instruments for this purpose.

Apart from not needing to worry about storing your Ethereum, trading CFDs on eToro gives you access to margin trading, which means you can borrow money to open larger positions. Trading on leverage is a high-risk investment strategy which you should only opt for if you fully understand the risks involved. With margin trading, there is a higher possibility of losing some or all of your investment capital.

Practice Makes Perfect

Investing with eToro is convenient and easy, but developing the right investment strategy for you can take time. Before you start investing your money in Ethereum you should carry out basic research on different strategies and read up to date cryptocurrency news to understand trends and external factors which can affect the price. The best way to do all this is to follow Cryptimi’s guides and cryptocurrency news, which are updated daily, providing you with the most important information, in a concise, yet detailed format.

The best way to learn is to practice, so eToro offers you the possibility of using a demo account. With this account, you can test out different strategies and techniques without risking any of your own funds. eToro’s demo account works exactly like the real platform, with price changes and tools behaving in the same way.

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

Regular Asset Trading vs Ethereum CFD trading

eToro is one of the few online trading platforms which gives you direct access to both Ethereum assets and Ethereum CFDs. Buying and selling Ethereum assets is normally carried out when you plan to utilise the coin itself or wish to use it buy another cryptocurrency. Today, there is an increasing number of online shops with support Ethereum payments, and eToro offers you a convenient and fast platform where to get hold of digital currency.

Ethereum CFD trading, on the other hand, is best for those looking to generate a profitable return when trading Ethereum. Whilst there are some additional benefits to CFD trading, most investors who opt for this financial instrument are looking to invest in cryptocurrency without needing to worry about storing it securely.

Protecting cryptocurrency involves owning a wallet and keeping private keys and other passwords secure. If you don’t need to own the underlying asset, then Ethereum CFD trading might be a better fit, since its faster to get started and you don’t need to understand how crypto wallets work.

Leveraged Trading & Associated Fees

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

eToro offers one of the most transparent and simplified fee structure in the industry. In most cases, eToro does not charge any deposit fees, whilst the withdrawal fee is set at $25 per withdrawal, irrespective of the amount. It, therefore, makes sense to group your funds together before making a withdrawal. The platform’s main fiat currency is USD, so if you are depositing or withdrawing funds using an alternative currency, conversion fees would apply.

eToro does not charge any commissions, with the main trading fee being the spread. Spreads are payable whenever a position is opened or closed and vary depending on the asset. In Ethereum’s case, eToro’s spread is 1.9%, and like all other cryptocurrencies, trading is allowed 24 hours a day. Fees for cross markets vary significantly.

When using leverage or keeping a CFD position open overnight, eToro applies an overnight fee. This fee varies depending on the asset, but in Ethereum’s case, this is -0.061025 irrespective of whether you have a short or long position open.

Withdrawing Your Ethereum From eToro

At the moment eToro does not support Ethereum withdrawals, so you would need to liquidate your assets into USD before carrying out a withdrawal. The platform offers three convenient ways to make withdrawals:

  • Bank transfer
  • Credit / debit cards
  • PayPal

Withdrawals are processed instantly but it can take up to a few days for the funds to reach your account.

Overall Verdict

This guide has covered the main characteristics of trading Ethereum on eToro. Some information will undoubtedly change as the platform is constantly improving and releasing new tools and features. Whenever you need any assistance you can make use of eToro’s helpful customer care team. In addition, the platform includes detailed information on its FAQs page.

It doesn’t take long to understand why eToro is today one of the best online trading platforms in the world. Offering a range of convenient services, and a range of tools and features, the platform is ideal for both novice and experienced traders. Apart from being reputable and safe, eToro is also licenced and regulated by a variety of authorities.

Using eToro’s Ethereum trading platform is easy and intuitive, and available on mobile. Help is always at hand, and you can always search the help page in case of further assistance. Apart from researching and carrying out your own trades, you can make use of the CopyTrader and demo account, which are available for free anytime. 

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