Trading Crypto on eToro Explained
eToro is a world leading social trading platform which offers its users options to invest in a variety of assets including real stocks, currencies, commodities, cryptocurrencies, ETFs and CFDs. If you’re looking for a relatively new market to invest in, why not try the cryptocurrency market. This market is arguably one of the most exciting due to being highly volatile but don’t let this put you off, it just means that in theory anyone could profit! Whether you’re a beginner or seasoned veteran, trading crypto on eToro has never been easier and this article will show you why.
What Are Cryptoassets?
Cryptoassets or cryptocurrencies are digital assets or electronic cash which are intangible. They are decentralised which means that they are not regulated by a government or central bank and transactions are carried out through a digital ledger system known as blockchain. This prevents any form of market interference and manipulation which can be seen as an advantage for many. The most popular cryptocurrencies that eToro provides include Bitcoin, Ethereum, Litecoin and Binance Coin so you can choose to invest in any of these or from a range of many more.
It is recommended that you do your own research before choosing what cryptoassets to invest in. eToro provides a range of tools which you can use to help you, for example, by clicking on ‘Stats’, you can view the performance of any cryptoasset available on the platform to help you make wiser decisions.
Cryptocurrency Volatility
Cryptocurrency markets are widely known for their high levels of volatility which is explained by the majority of investments being based on short-term speculative strategies including “short selling” and “going long”.
Short selling: When a seller lends a trader a certain asset and the trader sells the asset immediately with the belief that the asset price will fall. If the asset price does fall, the trader will buy back the asset and will have made a profit. The assets are then returned to the broker while the trader gets to keep the difference. eToro allows for users to open short (SELL) positions but they will be opened as CFD positions.
Going long: In theory this is the opposite of short selling. The trader buys and has ownership of assets and will speculate that asset prices will increase.
If you choose to take part in short selling or going long, make sure that you are aware of the risks associated with trading CFDs.
How To Trade Crypto
To start trading crypto on eToro, you will first need to create an account. Join now by clicking on this link: https://med.etoro.com/B16720_A96120_TClick_SX1.aspx and make your way through the simple sign up process. Next, follow these steps:
1. Search for the crypto that you are interested in and would like to buy.
2. Select your chosen crypto and click ‘Trade’.
3. Select your desired deposit amount (minimum 25 USD for crypto).
4. Finally, click ‘Open Trade’ and you’re done!
Copy Trading
If you don’t have the time or feel as though you lack the experience to invest in the cryptocurrency market then you can use eToro’s popular CopyTrader feature to make things much easier for yourself. By using this feature, you can instantly copy the trading activities of top traders on the platform and earn up to 15% per annum on your investments. To find a top-performing crypto trader, click on the ‘Copy People’ tab and filter the ‘Who invest in’ option to ‘Crypto’. After clicking ‘Go’, you will be provided with a list of the top crypo traders, simply copy their trades and when they profit, so will you.
Advantages of Trading Crypto on eToro
So, why should you trade crypto on eToro? Well, here are the main advantages:
1. eToro offers a range of cryptoassets which are easy to find and trade.
2. No daily cap on withdrawals which means that you can withdraw as many of your funds as you wish (not all trading platforms offer this).
3. eToro is a community with millions of users so you can interact with other traders on the platform and share ideas and grow together.
4. eToro is safe and secure. It operates in a multi-regulatory environment under FCA (UK), CySec (EU) and ASIC (Australia).
Disclaimer: eToro is a multi-asset platform which 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. 75% 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 which can fluctuate widely in a very short timeframe 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.
This guide is intended for educational purposes only and should not be considered as investment advice. The author and publisher are not liable for any losses or damages you may incur as a result of you following the advice given on this page. The etoro.com layout and content may change since this content was published.
