Should you Buy Bitcoin on eToro

eToro is a popular choice for investing in Bitcoin in Australia. I believe there are both pros and cons to trading through eToro. So before jumping into the world of crypto trading, make sure you read this post.

What you need to know about Buying Bitcoin on eToro

eToro is a trading platform, not a cryptocurrency exchange. eToro does offer an exchange product called eToroX. If you are looking to just buy and hold crypto, then you can use an exchange. If you're looking to profit off the movement of crypto then the eToro trading platform could be for you.

CFD Trading

Note – this post is about the Australian version of eToro and does not apply to the U.S or other international eToro platforms which offer different products.

In Australia, when you trade crypto through eToro you are trading a CFD. There are pros and cons to CFD trading. Some CFD trading platforms are really bad, however eToro has done a pretty good job with their product. Bitcoin CFDs on eToro are unleveraged. This means you can't lose more than you've invested. And there are no overnight or weekly fees (for long positions). This means you can invest in Bitcoin and hold it for the long term gains.

Pros of Buying Bitcoin on eToro

Here are some of the pros of investing in Bitcoin through eToro:

  • Trade alongside other assets – eToro is one of my favourite platforms for trading US stocks. It's nice to be able to build a portfolio of Stocks (eToro offers real stock, not CFD trading), cryptos and other assets.
  • Copy Trading – With Copy Trading you can automatically copy the trades made by more experienced traders. When they make a trade, your account will make a similar trade. You can follow and copy crypto traders through eToro. It's a great way to learn more about trading.
  • No fees – When you open a long position on eToro you aren't charged any fees or commissions. This means you can hold your Bitcoin postion for the long term. eToro doesn't charge any commissions when you open a crypto trade. They charge a spread which is the difference between the buying and selling prices.
  • Good Deposit Options – you can deposit using a bank transfer, PayPal or Credit Card. They offer near instant deposits so you can jump into trading without missing a move.
  • Security – eToro has been around long before Cryptocurrency was a thing! When you trade crypto on eToro in Australia you don't need to worry about your account getting hacked or the exchange getting hacked. You're trading a CFD. eToro is a publicly traded company and have a good reputation.

Cons of Buying Bitcoin on eToro

  • You can't easily withdraw the Bitcoin – I believe there is a way to withdraw Bitcoin from eToro into their “eToro Money” app. The process seems way too convoluted. In putting together this article I tried to test it out and couldn't get it to work. When you close/sell your position on eToro you can easily withdraw the money you've made.
  • Spread – The spread on eToro isn't as tight as other platforms.
  • You aren't buying the actual Crypto – Remember on eToro you are trading a CFD. If you are looking to just buy some Bitcoin and hold onto it in a secure wallet (don't keep your crypto coins on exchanges), then I would recommend Coinspot.

Should you buy Bitcoin on eToro?

If you're looking to just buy some Bitcoin as a speculative investment, I would just buy it through CoinSpot and hold onto it. If you're looking to trade Bitcoin, (aka profit from market moves) which is more complex, then I think eToro makes a good option.

If you're looking to add Bitcoin to part of a larger portfolio than Bitcoin could also be a good option. You can invest in Bitcoin alongside US, UK and EU shares. If you want to try copy trading, then it's also a good option.

is eToro a Good Binance and FTX Alternative?

I prefer to use eToro over Binance and FTX for crypto trading as it has a much nicer interface. Trading through a platform like FTX can be very intimidating. It's also possible to lose more money than you've invested when you trade Futures on FTX or Binance. On eToro, there is no option to add leverage or margin to Bitcoin trades. You can't lose more money than you've invested. So for newer investors (while there is still risk), I believe it is a less risky option compared to those other platforms.

Find out more about eToro here

This post is for educational purposes and should not be considered as investment advice. This post is based on individual experience and journalistic research.

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