The article breaks down what you can do on eToro by explaining the basics for beginners who are just starting with cryptocurrencies. If you are new to crypto trading and considering this broker, then this is a must-read.
But first, what is eToro?
eToro is a leading social trading and multi-asset brokerage company. It provides a stock trading platform and includes Bitcoin (BTC) and Bitcoin Cash (BCH) to its list of tradable cryptocurrencies. The platform offers traders high liquidity, the ability to trade on the go, and an easy-to-use interface. In other words, it’s a very beginner-friendly option for those trading their first tokens. The only other broker that offers this same level of service is Coinbase.
What cryptocurrencies are available?
Currently, you can trade over 40 accredited cryptoassets on their platform. They support Bitcoin, Bitcoin Cash, Ethereum, Dash, Litecoin, Stellar Luments, Shiba and the rest are those that have the largest market capitalization. eToro Shiba Inu coin trading has been very active over the past few months due to this memecoin getting more attention from mainstream media.
Be aware that new cryptocurrencies may be added to the platform and some of your current coins might be removed. This is due to changing market conditions.
So how can I buy crypto?
The typical method of purchasing crypto is that you can buy crypto via several methods, including wire transfer and credit card. These will place the tokens in your wallet account. eToro, on the other hand, takes care of the purchase for you and keeps them in a separate account belonging to you. You can hold these tokens and if the price of your crypto increases, you receive a profit. If the price decreases, you have an overall loss of investment.
Keep in mind that some countries might not offer it due to laws and regulations. For example, if you live in Australia and are subject to the Australian Securities and Investments Commission, the only investment option you’ll be allowed to make is in CFD’s. This is due to ASIC requirements, which outlaw other forms of trading.
Contracts for difference or CFDs explained
Here’s something that you might not be aware of: You can trade on any cryptocurrency without owning it using CFD which is short for “Contracts for Difference”. This type of derivative enables you to profit from both an upward and downward price change. Assuming you’re only risking the small difference in price, your profits are theoretically limitless!
If you predict that the cryptocurrency’s value is going to go up, you may want to consider liquidating CFDs with a Buy position. If you predict that the cryptocurrency’s value is going to go down, you may want to liquidate your CFDs with a Sell position. That’s how simple it is.
Keep in mind that if you want to exchange cryptocurrencies, CFDs are not very suitable. With CFDs, you do not actually have the cryptocurrency and cannot transfer it to a wallet.
eToro’s crypto fees
The trade benefits of eToro is that there are no fees. When it comes to cryptocurrencies, there are spreads but no fees on your deposits. For instance, Bitcoin and Ethereum spreads are 0.75% and 1.90%, respectively. Do take note that eToro charges a yearly fee of $10 after 12 months of inactivity, but this doesn’t have to happen as long as you access your account often.
Stop-loss to protect your trades
A stop loss is a strategy that allows you to trade in cryptocurrencies with peace of mind. You can use it when trading on eToro so that you can lessen losses when the value goes against you. It can automatically close a trade when the price reaches a specific level. Stop losses cannot be set by default but you can manually input one threshold or want to stop losses based on your system or calculation.
eToro’s unique copy trading feature
If you’ve been trading the cryptocurrency market for a while and believe you’ve got what it takes, eToro could be the platform for you. They offer a CopyTrader feature that allows experienced traders to showcase their successes and strategies to others seamlessly.
But if you’re a newbie, you can use this feature to your advantage as well. eToro’s CopyTrading helps you make money commission-free with their CopyTraders who are pre-trained, experienced traders. All you have to do is pick the right trader, copy their positions, set your investment amount and if they make money, so do you.
And there you have it. Now that you know the basics and your options, you’ll be more than ready to invest in any of the crypto assets that are offered by eToro. Don’t forget that cryptocurrencies are highly volatile assets so your capital may be at risk so take precaution and invest wisely!