Why eToro is Bad for Cryptocurrency

“If I had known, I’d never have invested on eToro,” says Peter, a small-scale crypto trader who thought he was taking a low-risk leap into the crypto world. He’s not alone. Many investors have voiced similar regrets, sharing their grievances about how the platform has harmed their cryptocurrency journey. Here’s why:

1. Hidden Fees: More than Meets the Eye

The fees on eToro are not always transparent, especially for beginners. At first glance, eToro may appear to offer zero-commission trading. However, this isn't the full picture. The platform charges spreads—the difference between the buy and sell prices. These spreads can be significantly higher than other platforms, especially when it comes to cryptocurrency. While most traditional brokers take a percentage fee per trade, eToro’s spread-based model can become quite costly as trades accumulate.

For example, let’s compare fees with a table:

Platform	Spread on Bitcoin	Withdrawal Fee	Other Hidden Fees
eToro	0.75%	$5	Inactivity fees
Binance	0.1%	$1	None
Coinbase	0.5%	$1.99 (USD)	None

Many users find themselves blindsided by these fees after a few months of trading, seeing their potential profits significantly cut.

2. Lack of Real Ownership: No Wallet Control

Perhaps one of the most significant downsides of eToro for crypto traders is that you don’t own the actual cryptocurrency you trade. This means that users cannot transfer their crypto holdings to an external wallet for safekeeping. Instead, they are locked into the platform's custodial system. For seasoned crypto enthusiasts, this goes against the very essence of cryptocurrency, which is decentralization and control over one’s own assets.

Imagine Peter wanted to move his Bitcoin to a cold storage wallet for enhanced security. On eToro, he simply can’t. He’s forced to leave it within the platform’s control, relying on their security infrastructure, which for some users, feels like an unnecessary risk.

3. Social Trading: Helpful or Harmful?

eToro’s main selling point is its “social trading” feature, where users can follow and copy the trades of popular investors. At first, this sounds like a great tool for beginners. Why not follow a crypto expert with a proven track record? However, many top traders on eToro aren’t specialized in cryptocurrencies. Most of them are primarily stock traders who dabble in crypto for diversification, meaning they may not fully understand the volatile and unique nature of the market.

This can be especially harmful during volatile periods. One trader might be successful in traditional markets but may have no idea how to navigate the rapid and unpredictable swings of the crypto market. Following their moves could lead to significant losses, as crypto doesn't follow the same patterns as traditional stock markets.

4. eToro’s Long Withdrawal Times

In the fast-paced world of cryptocurrency, timing is everything. However, eToro’s withdrawal times are notoriously slow compared to other platforms. On most exchanges, crypto withdrawals are processed within minutes or hours. On eToro, it can take days. For an asset like Bitcoin, whose price can swing dramatically in a matter of hours, such delays can lead to lost opportunities.

John, another user, shared how he tried to withdraw his profits after a huge Bitcoin rally. But by the time the funds arrived in his account days later, Bitcoin had already dropped significantly in value, and he missed out on the gains.

5. Limited Cryptocurrencies

Another issue traders face is eToro’s relatively limited selection of cryptocurrencies. While many exchanges offer hundreds of different crypto assets, eToro focuses on a select few. For example, eToro supports major players like Bitcoin, Ethereum, and Ripple but lacks many of the emerging altcoins that are gaining popularity.

For those looking to diversify their portfolios or invest in up-and-coming crypto projects, this is a huge drawback. The limited options can make investors feel boxed in, especially if they're eyeing more volatile yet potentially profitable assets.

6. Marketing vs. Reality

eToro’s marketing strategy paints a picture of simplicity, ease, and financial freedom—especially when it comes to cryptocurrency. The platform’s advertisements often feature everyday people turning into successful traders overnight. However, the reality is far more complex.

Many beginners enter eToro expecting to make quick profits without realizing that trading cryptocurrency, especially on eToro, comes with its own set of challenges. The combination of high spreads, slow withdrawals, and limited cryptocurrency offerings can be a rude awakening for newcomers expecting to profit easily.

The platform’s “easy-to-use” interface, while friendly, can also be misleading. Novice traders can be lulled into a false sense of security, making poor trading decisions or underestimating the volatility of crypto markets.

7. eToro and Regulatory Concerns

Finally, regulation issues can be a significant red flag for investors. While eToro is regulated in several regions for traditional assets, its cryptocurrency services may not be covered under the same protections. This lack of regulatory clarity, especially for users outside Europe, can leave traders vulnerable in the event of disputes or issues with their accounts.

The Verdict: eToro is a Risky Choice for Crypto

eToro may work well for stock traders or beginners in the world of traditional investments. But when it comes to cryptocurrency, the platform has several significant downsides that can end up costing users more than they expect. The hidden fees, lack of control over one’s assets, slow withdrawals, and limited coin selection are just a few reasons why many cryptocurrency enthusiasts advise against using eToro for serious trading.

If you're considering investing in cryptocurrency, there are better platforms out there—ones that offer more transparency, control, and a wider range of assets. The allure of eToro’s easy interface and social trading might seem tempting at first, but the trade-offs are substantial.

Take Peter’s story as a lesson. What began as a seemingly safe bet turned into a frustrating experience with unnecessary fees and restricted control. And for seasoned crypto traders, these are deal-breakers. The world of cryptocurrency is about freedom, ownership, and decentralization—all things that eToro struggles to offer.

Ultimately, while eToro may offer ease of use for beginners, it’s not a platform built with the needs of serious cryptocurrency traders in mind. There are far better options that empower you to control your assets fully, keep fees low, and access a wider array of cryptocurrencies.