eToro: A Guide to One of the Biggest Crypto Companies

Key Points

• eToro is a company that set out to change stock trading and crypto trading.
• eToro is a big name in both the stock and crypto world
• In July of 2013, eToro expanded its offerings, particularly stocks and crypto.

The Founding of eToro: How it Happened

eToro is an innovative company that set out to revolutionize not just stock trading, but crypto trading as well. The eToro platform is truly massive, with 25 million users and growing.

With a lineup of innovative services and products, eToro stands out among peers in the stock and crypto space alike. Founded in 2007, the company set out to “disrupt” the world of trading. Since then, they have done just that.

eToro is a big name in both the stock and crypto world, and for good reason. Through the socialization of trading, the company has brought a uniquely modern spin that allows everyday investors to get into the sometimes complicated world of finance.

Today, we are going to explore the history of the company, some of its major offerings, and how it got started.

The History of eToro: What to Know

eToro was founded in 2007 under the name RetailFX in Tel Aviv, Israel. Two brothers, Yoni Assia and Ronen Assia, alongside David Ring, founded the original company to make trading accessible for users around the world.

Part of what allowed eToro to accomplish that mission was through their use of easy-to-understand software, teaching programs and materials, as well as innovative products. Using something they created known as Visual FX, the company created graphic representations that depicted various financial tools and options. Often, these depictions were simple, fun, and easy to understand.

In 2009, eToro launched its online trading platform, known as WebTrader, allowing anyone to trade in the world. As their original mission stated, this platform had simple-to-use options but also allowed for advanced users and traders.

eToro became a unique organization when it launched OpenBook and CopyTrader in 2010. Taking queues from the internet world or social media and modern technology, the company began allowing traders to copy other traders. This “social trading platform” would revolutionize the industry, as small investors could simply copy the trades of larger, more advanced traders around the world.

Since then, eToro has continued to innovate. As one of the early adopters of crypto, eToro began offering bitcoin trading on their platform as early as 2013. Additionally, they expanded their offerings to include dozens more, with additional tokens being added constantly.

Currently, the company has more than 20 million users in over 140 countries.

eToro Through The Years

2007-2010

eToro was founded in Tel Aviv, Israel, by Yoni and Ronen Assia, alongside David Ring. The company was founded under the name RetailFX but has since changed. It was founded with the express purpose of providing investing tools and opportunities to beginner investors.

Using their VisialFX trading platform developed in 2007, the company created user-friendly animations, tools, and graphics that made learning financials easy and fun.

In May of 2009, eToro launched WebTrader, their online portal. WebTrader allowed the trading of financial assets online and included new tools to better enable beginners, as well as empower advanced traders.

In July of 2010, eToro launched what many consider to be their biggest innovation. OpenBook and CopyTrader are both features that allow users to copy the portfolios of other famous investors. Using this method of “social trading”, users can follow the exact trades of wealthy and established traders.

You can simply click a tab titled “Popular Investors” and simply tie your portfolio to theirs. eToro would go on to win the Finovate Europe Best of Show for 2011 for this innovation.

2011-2013

In April of 2012, eToro would release their mobile app. The mobile app would have all of the functionality of their online portal, only accessible by phone or tablet anywhere in the world.

In July of 2013, eToro expanded its offerings, particularly stocks and crypto. Now, users could trade worldwide stocks, commodities, currencies, and crypto all through their online or mobile apps. Official crypto trading would be released to the public in January of 2014.

2014-2016

In January of 2014, eToro released crypto trading to the public, although its initial offerings were small.

In February of 2016, eToro introduced CopyPortfolios. CopyPortfolios are groups of assets or individuals that have similar themes. A user can then invest according to that “theme”, similar to how a mutual fund works. The CopyPortfolios have titles like 5G, Cloud Computing, and Green Energy and often use machine learning (artificial intelligence) to curate certain strategies and investments.

2017-2019

In February of 2017, eToro expanded its crypto offerings to include Ethereum, XRP, LTC, and a few other popular cryptocurrencies.

Coinciding with their crypto trading platform, eToro released its crypto wallet app for Android and iOS in 2018. Users could now store their digital assets on the eToro wallet.

In March of 2019, eToro made a major expansion and began servicing US markets in a limited fashion. They would later expand to offer more services and products in later years, namely crypto and worldwide stock trading.

In May of 2019, eToro announced their 0% commission fees on stock trading around the world.

2020-Present

In March of 2021, eToro announced its intentions to go public. It would be traded through a reverse subsidiary merger with FinTech Acquisition Corp V and would further operate as eToro Group LTD.

In November of 2021, eToro began offering financial services like banking accounts, debit cards, and an online app for management, collectively known as eToro Money. Users investing from an eToro account gain certain benefits, including little to no fees, among others.

In February of 2022, eToro fully expanded its operations to the United States, offering eToro stock and crypto trading, as well as access to eToro Money.

What are the Most Important Products From eToro?

Stock Trading

The initial offering from eToro is still one of their largest today. The company’s platform allows for the trading of stocks, options, ETFs, mutual funds, and more.

Crypto Trading

The company was one of the early adopters of crypto back in 2013. In 2013, they opened up bitcoin trading across their platform and have been expanding ever since. Currently, they offer trading on bitcoin, ether, litecoin, XRP, and 60+ other cryptocurrencies. Additionally, they often expand and add more.

Social Investing

One of the most revolutionary aspects of eToro is its social investing options. The first social investing options on their platform included CopyTrader and OpenBook. CopyTrader allows users to tie their investment accounts to high-level investors and account managers, essentially copying the trades, albeit usually with less money.

Additionally, it incorporated forum-like social aspects into its trading platform allowing conversation, resources, and training to occur at a social level.

A few years after CopyTrader, CopyPortfolio was introduced. CopyPortfolis is an offering that groups certain industries or investors based on their industry or investing style, respectively. Users can then invest in large, grouped portfolios (things like 5G tech, AI, or renewable energy), similar to the way a mutual fund operates.

eToro Money

eToro Money is an offering that was recently introduced back in 2021. The services offered by eToro Money are baking oriented and include a Visa debit card, secure money account, and access to all their financial services through a dedicated app. Users investing using their debit card or accounts enjoy certain benefits on their platform.

How Does eToro Make Money?

eToro makes money differently on each of its products. Their major revenue stream comes from the trading of stocks and the fees associated with this trading. The fees associated with stock trading are known as the “spread” and are common on most trading platforms. Currently, it offers 1% commission treading on cryptocurrencies and 0% commission on stocks and ETFs.

Aside from spread and commission fees, eToro makes fees on overnight and weekend trades, withdrawals, and conversions.

eToro Acquisitions

Firmo – 2019: Undisclosed

In March of 2019, eToro acquired the Danish blockchain company Firmo for an undisclosed number. Firmo was a smart contract provider that operated across multiple blockchains and formulated contracts for multiple cryptos and crypto derivatives. Acquiring Firmo was a step towards eToro expanding its digital asset trading options and security.

Delta – 2019: ~$5 million

In November of 2019, eToro acquired the Belgium crypto tracker company Delta for an undisclosed number, although some sources claim it was for $5 million USD. Delta is a crypto portfolio tracker that allows users to track and analyze their assets across more than 180 exchanges. The acquisition allows the company to provide more expansive tools and services to users looking to track international assets.

Marq Millions – 2020: Undisclosed

In 2020, the company acquired a UK-based financial company for an undisclosed number. This UK-based financial organization would be renamed and branded to eToro Money, one of the company’s now-major offerings.

eToro Notable Controversies

Positional Closures in Magnit PJSC

In March of 2022, the company announced that positions on Magnit PJSC had defaulted at a stop loss of $0.01 per share. The problem was due to a lack of liquidity, along with other Russian-based stocks, in light of international sanctions that same month. Despite the closure of all positions, eToro reimbursed users the money, despite Magnit PJSC being suspended on almost all markets internationally.

Leveraged Crypto Positions

In January of 2021, eToro announced the closure of all leveraged crypto positions. Within a few hours, they had closed all leveraged margin positions. Lawyers announced intentions to file a class-action lawsuit, although nothing has come of the announcement yet.

Gamestop Short Squeeze

After the short squeeze on GameStop, an outcry that eToro had changed its terms of service to enforce a stop-loss on its non-leveraged positions began emerging.

The resulting aftermath had some users losing money after their unfavorable positions on GameStop had been realized, while others claimed that eToro had intentionally brought down the price of GameStop through such methods.

Next Up…

• The Morris Worm Virus: How it Works and How to Protect Yourself
• Browser Hijacker: How They Work and How to Protect Yourself
• Snapchat Complete History: Founding, IPO, and Controversies