eToro Cryptocurrency Review (2022)

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eToro Cryptocurrency Review
  • Beginner Friendly
  • Payment Methods
  • Speed
  • Fees
  • Functionality
3.8

Summary

eToro allows you to quickly buy, sell, and store more than 40 cryptocurrencies in the UK. This includes Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).

Fees are included in the exchange rate you’re quoted. You’ll pay just 0.75% in spread fees when buying or selling Bitcoin (BTC). However, it goes up to 5% for other cryptocurrencies (which is not great).

Withdrawing cryptocurrencies from eToro is also quite a faff (and can be expensive).

I would rather use a dedicated cryptocurrency broker or exchange. Check out the link below for some better alternatives where you can buy Bitcoin (BTC) in the UK.

eToro is a popular international investment platform that also offers simplified crypto trading.

But is eToro’s crypto trading platform worth using?

In this eToro review, I’ll run through how eToro’s crypto trading feature works, whether you can withdraw your coins to an external wallet, and what fees you can expect.

Let’s get straight to it.

How Does eToro’s Crypto Feature Work?

eToro is an international online brokerage known for enabling investors to buy and sell stocks and other traditional assets. But it also allows you to buy and sell Bitcoin (BTC) and a limited number of cryptocurrencies via its platform.

Here’s a quick video that shows what it’s like to buy cryptocurrencies using the eToro mobile app:

If you already have an eToro trading account, you can buy Bitcoin (BTC) and dozens of other supported cryptocurrencies in a matter of minutes without having to jump through any additional hoops.

If you’re thinking about buying Bitcoin (BTC) for the first time, that’s pretty awesome.

But eToro’s convenience comes bundled with some notable drawbacks.

Do you actually own crypto when you trade on eToro?

The short answer? If you’re a UK-based trader buying crypto on eToro, you’re purchasing the actual cryptoasset.

But in other countries, the situation is a bit more complicated. That’s because eToro supports different kinds of crypto trades depending on where you live.

If you purchase crypto on eToro using non-leveraged buy (long) orders, you own the underlying cryptoasset. This is the only buy order type available to eToro traders in the UK.

But eToro also supports crypto CFDs (Contracts for Difference) in certain (non-UK) countries.

When you trade with a CFD, you’re effectively speculating on an asset’s price movements without buying the underlying asset. With CFDs, you’re technically trading with a CFD broker, too, not with other investors on an open market. So the underlying asset (in this case, crypto) never changes hands.

The following order types on eToro use CFDs for crypto trades:

  • Leveraged trades
  • Sell (short) orders
  • Crypto-crosses

When you place these order types for crypto trades, you do not own the underlying cryptoasset.

Due to Financial Conduct Authority (FCA) regulations, these types of CFD-backed trades are not available in the UK. This means that all UK-based investors own the crypto that they purchase on eToro.

Can you withdraw crypto from eToro?

You can withdraw crypto from eToro… but doing so isn’t straightforward.

eToro only lets you withdraw crypto that you bought using a non-leveraged position that’s backed by real coins (not a CFD). It also only allows withdrawals of the following cryptocurrencies from trading accounts:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Bitcoin Cash (BCH)
  • Litecoin (LTC)
  • Stellar Lumens (XLM)
  • Ripple (XRP)

But there’s a catch.

While you can withdraw some cryptocurrencies from eToro, you cannot send crypto back to eToro.

If you want to sell your crypto after transferring it from eToro, you need to send it to a different exchange or broker – like CoinJar or Coinbase Pro.

On top of that, you can only transfer your crypto from your eToro trading account to the eToro Money crypto wallet.

But if you want to manage your coins from a different wallet, you’ll first have to withdraw them to the eToro Money crypto wallet and then send them elsewhere. Depending on what crypto you’re sending, you could rack up quite a lot in transaction fees with all these transfers.

Supported Cryptocurrencies

eToro supports trades of over 40 cryptocurrencies, including:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Litecoin (LTC)
  • Cardano (ADA)
  • Polkadot (DOT)
  • Shiba Inu (SHIB)
  • Dogecoin (DOGE)

Payment Methods

UK residents can deposit British Pounds (GBP) into their eToro trading account using a:

  • UK bank transfer
  • PayPal
  • Neteller
  • Skrill
  • Trustly
  • Credit and debit cards

Keep in mind that eToro only operates in US Dollars (USD). This means that your funds will be converted into USD before they’re made available for trading.

If you withdraw fiat from eToro, your US dollar (USD) will be converted to GBP before you receive them. You’ll also be charged a fixed fee of $5 (which is quite steep).

Supported Countries

eToro is available in dozens of countries, including the UK, USA, Australia, and most of the EU.

Crypto trading with eToro is available in all the countries where eToro operates.

Cryptocurrency Fees

Buying & Selling Fees

One area where eToro really shines is in its fee transparency. As of the time of writing, eToro’s spread fees range from 0.75% to 5.0%.

eToro’s current spread fees on popular cryptoassets include:

CryptocurrencyeToro Spread Fee
Bitcoin (BTC)0.75%
Etheruem (ETH)1.90%
Litecoin (LTC)1.90%
Cardano (ADA)2.90%
Dogecoin (DOGE)2.90%
Compound (COMP)
3.90%
Decentraland (MANA)4.90%
Tezos (XTZ)5.00%

The fees for buying and selling Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) aren’t too bad.

However, paying up to 5% when buying and selling cryptocurrencies on eToro isn’t a great deal. You’ll pay much lower rates if you go with a dedicated cryptocurrency broker (e.g., CoinJar) or exchange (e.g., Kraken) instead.

But I thought eToro was a zero-commission trading platform?

eToro markets itself as a zero-commission trading platform, so you won’t be charged a per-transaction fee whenever you place a trade.

However, this doesn’t mean that trading is free on eToro.

Instead of a commission fee, eToro charges a “spread fee”, which is the difference between the asking and selling price of an asset during a trade. Many brokers and exchanges charge a spread fee and a commission fee on trades – but eToro solely takes the spread.

Crypto Withdrawal Fees

You’re charged a 0.50% fee on all crypto withdrawals from your eToro investing account to your eToro Money crypto wallet. This fee is capped at $50 – so you’ll pay less for sending larger quantities of crypto.

But while this 0.50% fee is arguably reasonable for some cryptoassets like Ethereum (ETH) that have high network fees, it doesn’t really make sense for other coins like Stellar Lumens (XLM) and Ripple (XRP).

Transaction fees for sending cryptocurrencies like this are low – even when you’re sending a large amount. For example, Kraken (a popular crypto exchange) charges less than a penny to send XLM somewhere else.

Cryptocurrency Limits

eToro doesn’t appear to have any major limits on the amount of crypto that you can trade in the UK.

However, you can only have 2,000 open positions in your eToro account at any one time – across all stocks, cryptocurrencies, and other assets. (For most people, that’s more than enough.)

eToro also has limits on crypto CFD trading to limit your potential losses. However, this isn’t available in the UK – so this is only relevant if you live in a different country.

Cryptocurrency Wallets

The crypto that you own in your eToro account is pooled together with the crypto that other eToro investors have in their accounts. These cryptoassets are held by eToro in an institutional wallet.

And, contrary to what you might read elsewhere, you can withdraw Bitcoin (BTC), Ethereum (ETH), and a handful of other cryptoassets to an external wallet that you control.

However, the process isn’t ideal.

This is because eToro doesn’t support direct transfers to any other wallet other than the eToro Money wallet.

Here’s what you’d have to do to withdraw Bitcoin (BTC):

  1. Buy Bitcoin (BTC) on eToro.
  2. Download the eToro Money app to your mobile device.
  3. Transfer Bitcoin (BTC) from eToro to the eToro Money app.
  4. Withdraw Bitcoin (BTC) from your eToro Money Crypto Wallet to an external wallet.

All those transactions can result in some hefty fees.

eToro also only lets you transfer a handful of cryptoassets from your investment account to the eToro Money crypto wallet. You also can’t send coins from an external wallet to your trading account.

On top of this, you’ll be temporarily restricted (for up to 60 days) from withdrawing cryptocurrency when depositing GBP via credit/debit card, PayPal, Sofort, or Trustly.

It’s hard to see the benefit of jumping through all these hoops when there are simpler (and cheaper) options available.

How do I withdraw BTC from eToro to the eToro Money app?

FYI:

  • You must transfer the entire balance in your eToro account.
  • It can take up to 5 business days for this transfer to be processed.
  • You CANNOT transfer any coins from your eToro Money wallet to your eToro trading account. It is a one-way transfer.
  • The eToro money wallet is advertised as non-custodial (i.e., you get the private keys), but it’s connected to your eToro account and seems to be custodial (i.e., they hold the private keys).

Process:

You can click to enlarge any of these images.

  • Open your account and go to ‘Portfolio’.
  • Find and click on the Bitcoin (BTC) logo.

  • Select the gear icon on the right side of this page.

  • A window called ‘Edit Trade’ should pop-up.
  • Below the ‘Invested’ line, click the link that says ‘Transfer to Wallet’.

  • A confirmation window should pop-up with the details. Confirm the transfer if you’re happy.

Summary: There Are Better Options

eToro’s crypto trading functionality isn’t bad, but it’s not impressive either.

On the positive side, eToro is a quick, convenient, and super straightforward way for investors who already have an eToro account to dabble in crypto. There’s also loads of ways to deposit GBP into your account.

But there are better options out there which are just as simple and easy to use.

Here are three key reasons why I won’t be buying crypto with eToro anytime soon:

  • Withdrawal Restrictions: eToro lets you withdraw crypto, but you have to navigate a lot of nonsense to get there. It also only lets you withdraw 6 different cryptocurrencies and it has sizable fees for doing so.
  • High Spread Fees: Although some of eToro’s spread fees are reasonable (e.g., 0.75% for BTC), others are a bit high (up to 5%).
  • High Withdrawal Fees: eToro’s withdrawal fees for transferring cryptoasset to the eToro Money crypto wallet are also higher than at many other brokers and exchanges (0.5% of transferred amount, up to $50).

If you just want to see what the crypto hype is about, eToro makes it easy for you to buy and sell a few dozen top coins.

But when there are so many other low-fee exchanges in the UK that don’t make withdrawing your crypto so complicated or expensive? It’s hard to see why eToro would be your crypto trading platform of choice.

eToro Cryptocurrency Alternatives

Here are some alternative easy-to-use crypto trading platforms that you can use instead of eToro:

  • CoinJar: With CoinJar, you can quickly buy Bitcoin (BTC) and over 40 other cryptocurrencies with a UK bank transfer. CoinJar is even an FCA registered cryptoasset business and fees on the platform are 1% for all trades. You can also withdraw any crypto you buy on the platform to your external wallet with ease. Check out my CoinJar review for more information.
  • Coinbase: One of the world’s most popular crypto trading platforms, Coinbase offers a simplified way to buy and sell dozens of top cryptocurrencies. Fees for the firm’s instant buy feature can be pretty high for smaller transactions, but you can pay as little as 1.49% when you buy Bitcoin (BTC) with a UK bank transfer. Experienced crypto traders can also get lower fees on the Coinbase Pro exchange. Check out my Coinbase review for more information.
  • Luno: Luno makes trading crypto as easy as possible for first-time investors. You’ll pay only 1.5% in fees if you purchase Bitcoin (BTC) with a UK bank transfer using Luno’s instant buy feature. Luno also lets you buy crypto using a credit card, but this comes with a 3.5% fee. Check out my Luno review for more information.

Check out this post about the best places to buy Bitcoin (BTC) in the UK for more options.

Any Questions?

Thanks for checking out this review of eToro’s cryptocurrency functionality.

Got a question about it?

Let me know in the comments below!

Other Reviews

Legal Notice

eToro is a multi-asset platform that offers both investing in stocks and cryptoassets, as well as trading CFD assets. Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptoassets are volatile instruments that can fluctuate widely in a very short time frame and, therefore, are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and, therefore, is not supervised by any EU regulatory framework. Your capital is at risk.

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