In this How to Buy Bitcoin on eToro guide I will cover all the basics of how to buy Bitcoin on eToro as well as highlight what to look out for. Furthermore, I will offer you some tips and tricks to get the best value for money and transact in a safe secure manner.
In short, the process is much the same for many platforms. The steps are usually
- Sign up for an account
- Verify the account (KYC & AML)
- Deposit funds to the account
- Exchange your FIAT currency for Bitcoin
- Withdraw and store your Bitcoin safely
Of course, this is the Ultimate Guide on how to buy Bitcoin on eToro so we will be going a bit deeper.
Let us get to it!
So you want to know How to Buy Bitcoin on eToro?
As the first cryptocurrency, Bitcoin (BTC) is also the most established crypto asset. Bitcoin trading and roller coasters share a lot in common. If you’re investing for the long term, expect some ups and downs.
This has proven true throughout Bitcoin’s history, but Bitcoin has rewarded early investors handsomely.
If you invested $1,000 in bitcoin in December 2010, that my friend, would be worth more than $150 million today (Jan 2024).
Alternatively, if you had invested $1000 in the S&P 500 you would only have 5x it!
SPOILER ALERT: On eToro you can buy Bitcoin as well as exchange-traded funds and Index Funds!
So why Purchase Bitcoin on eToro?
Bitcoin’s leadership position means you have your choice of places to trade.
So why would anyone buy Bitcoin on eToro?
For beginners in particular, eToro offers one of the easiest ways to get started with Bitcoin.
- eToro makes the process of opening a trading account a breeze with fast onboarding. In just 5-10 minutes, you can be up and running.
- Account funding is easy with eToro, as they support bank deposits without any deposit fees. However, depending on your location, conversion fees may apply (eToro accounts trade in USD).
- When it comes to trading fees, eToro keeps it simple with a flat 1% fee for crypto trades.
- Don’t worry if you’re not a trading expert, because eToro has got you covered with copy trading. You can easily identify successful traders on the platform and copy their trades.
- To help you practice trading without any risk, every eToro account comes with a well-funded demo account. You’ll have $100,000 in virtual funds to perfect your skills.
- For Bitcoin enthusiasts, the eToro Money app serves as a reliable Bitcoin wallet. You can take custody of your Bitcoin, as well as send and receive Bitcoin off-platform. Please note that the app is currently not available for US customers.
Step-by-Step Guide to Buying Bitcoin on eToro
Step 1: Opening an eToro Account
To begin your journey, head over to the official eToro website. Simply tap on the “Join Now” button proceed to provide your email address and select a unique username.
On the subsequent screens, you will be required to furnish your name, address, and phone number. To ensure the security of your eToro account, a two-factor authentication method is employed, where a verification code is sent to your mobile device.
Step 2: Completing KYC (Know Your Customer)
To make sure we comply with regulations, they need to verify your identity. It’s a simple process – just securely upload a scanned copy of your government-issued photo ID, like a driver’s license or passport.
You may also need to provide a utility bill in your name to confirm your address.
Step 3: Making a Deposit
It is possible to associate a payment method with your eToro account. They offer support for bank transfers, and in specific regions, you may also have alternative options such as Skrill or Neteller at your disposal. (TIP: Make sure to verify your bank account details for withdrawals too)
When using eToro, the minimum deposit required is $10, although this amount may vary depending on your country. It’s worth noting that for cryptocurrency trades, the minimum trade amount is also $10. Therefore, it generally makes sense to deposit $10 or more.
TIP: Don’t waste your time with $10 deposits, you just going to throw money away. Invest what you can afford to lose but make it worthwhile. On the other hand, to simply “play around” use the DEMO ACCOUNT
Step 4: Searching for Bitcoin
Use the search bar to easily find Bitcoin or BTC, the trading ticker for Bitcoin. Just tap the Trade button to open the trading box and start your transactions.
Step 5: Placing a Bitcoin Order
eToro offers support for both market orders, allowing for swift trades at market prices, and limit orders, where you have the flexibility to set the desired price.
ORDER = Limit Order
TRADE = Market Order
By default, market orders are selected for convenience. On the other hand, limit orders provide greater pricing control, although they may not fill immediately or at all if the market price fluctuates.
Choose a trade type and set a trade amount. (TIP: It is your choice, however, I only use Limit Orders)
If everything looks good, open your trade.
After your trade is executed, you will find your balance displayed in the Portfolio section, conveniently located in the left menu.
Step 6: Optional Setup of eToro Bitcoin Wallet
Now that you know how to buy Bitcoin on eToro, it’s time to think about storage.
eToro offers the convenience of storing your Bitcoin in your trading account. However, certain traders prefer to transfer their BTC to a separate crypto wallet. The eToro Money app provides a seamless solution for Bitcoin storage and utilizes the same username and password as your eToro account.
Please note that eToro Money is not accessible to customers based in the United States.
TIP: NEVER LEAVE FUNDS ON AN EXCHANGE – LEARN HOW TO SELF CUSTODY YOUR CRYPTO IN A PRIVATE NON-CUSTODIAL WALLET!
How Do Crypto Wallets Work?
Bitcoin and other cryptocurrencies are safeguarded in a blockchain address, with the assets being governed by a private key. A crypto wallet secures this key, ensuring exclusive access to your digital wealth.
To regain access, most wallets employ a 12 or 24-word phrase. However, if this phrase falls into the wrong hands, control over your assets is compromised. Thus, prioritizing security becomes paramount.
eToro Wallet provides a secure storage solution for your cryptocurrencies, utilizing a login mechanism coupled with two-factor authentication to ensure the safety of your wallet. Rest easy knowing your digital assets are protected with top-notch security measures.
The eToro Self-Custody Wallet Auto-Setup
To effortlessly establish a Bitcoin wallet within the app, simply initiate a transfer from your eToro trading account. This streamlined process ensures convenience and ease, allowing you to seamlessly manage your cryptocurrency transactions.
- Click on the Portfolio link.
- Navigate to your portfolio and select BTC.
- Choose the trade you wish to transfer to your wallet.
- On the Edit Trade screen, tap Transfer to Wallet.
- Carefully review the details and proceed with the transfer if everything appears accurate.
- With this method, eToro effortlessly establishes your wallet and finalises the transfer.
You can also set up your Wallet Manually.
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- To download the app on your mobile device, simply tap on “Get Wallet App” in the left menu and scan the QR code. It’s a convenient way to get the app and enjoy its benefits!
- To access the app, simply log in using your eToro account credentials. Once logged in, select “Create Wallet” and opt for BTC.
Transferring Bitcoin to the eToro Wallet
Once set up, you can transfer additional amounts to your wallet as needed. The eToro Bitcoin app lets you send and receive Bitcoin to and from other wallets.
NOTE: However, there’s currently no way to send Bitcoin back to eToro for trading.
Why Choose eToro for Buying Bitcoin?
While eToro may not be the most cost-effective option for trading BTC, its trading costs are positioned in the mid-market range, offering a balance between simplicity and complexity. In the following sections, we will delve deeper into the intricacies of trading costs.
However, eToro’s true strength lies in its amalgamation of user-friendly functionality and robust capabilities.
User-Friendly Platform for Beginners
Bitcoin trades on eToro are executed seamlessly within seconds. The impeccably designed user interface extends to the mobile app, ensuring effortless navigation.
BONUS: Demo Account
eToro also hooks you up with a demo account. Each trading account comes loaded with $100,000 in virtual funds. This cool feature lets newbie traders learn the basics and try out different strategies. The virtual portfolios support all the fancy features on the site, like advanced charts and buy/sell indicators.
- Open and close basic trades
- Learn to use stop loss and take profit orders
- Test Copy Trading or Smart Portfolios before investing real money
CopyTrader, a super popular feature on eToro, lets you find awesome traders and allocate funds to follow their strategies. By syncing your trades with theirs, CopyTrader removes the guesswork of timing and connects you with experienced traders who have a proven track record.
Novice traders may not be well-versed in all trading jargon. Fear not! eToro’s help center lives up to its name.
When you search for limit orders, you’ll receive a concise explanation of how they function, along with handy walkthrough links.
Investment Diversification Options
While this guide primarily delves into investing in Bitcoin on eToro, it’s worth noting that the platform presents a plethora of trading choices.
This unique attribute empowers you to diversify your portfolio without the need to juggle multiple platforms.
Unlike most crypto trading platforms that solely concentrate on crypto assets, eToro stands out by offering a broad spectrum of investment options.
In the US, there are a bunch of investment options to choose from:
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- Stocks: Over 3,100 tradable stocks
- Exchange-traded funds (ETFs): Over 350 choices, including index ETFs and sector ETFs
- Crypto: Select from a range of sought-after assets like BTC and ETH, or opt for trading favorites such as DOGE and SHIB.
Additional choices are accessible in various parts of the globe.
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- Currencies (forex trading)
- Commodities (Oil, gold, wheat, and more)
- Options trading
- Leverage trading (TIP: Please be careful, most people lose when leverage trading regardless of the platform)
Automated Trading Tools and Features
eToro makes basic trades super intuitive and also gives you the option to put your trading on autopilot.
Two main features let you invest without making manual trades.
- CopyTrader
- Smart Portfolios
I mentioned CopyTrader before. It’s a cool feature that lets you follow the moves of top traders on the platform. You can check out their performance history and bios, and even take a look at their recent trades or portfolios. If you find a trader you like, you can start following them in just a few clicks. Just remember, that CopyTrading requires a minimum investment of $200.
When you set up a copy trade, you can also set a trigger to exit the position. This helps you cut your losses if the market goes against your trade. So, you’ve got a backup plan! 😉
Smart Portfolios, previously known as Copyportfolios, function similarly to ETFs by targeting specific sectors or investment objectives. For instance, the @Crypto-currency portfolio tracks the value of the two top cryptocurrencies, BTC and ETH. In contrast, the @Big-crypto portfolio expands the selection to encompass 19 cryptocurrencies. While BTC and ETH account for 40% of the portfolio, the remaining 60% provides exposure to other prominent crypto assets.
The range of tradable assets differs across regions, ensuring diversity in investment opportunities. To access Smart Portfolios, a minimum investment of $500 is required, providing a smart and efficient way to grow your wealth.
Fractional Investing and Low Minimums
Trades for crypto and stocks on eToro start at just $10! This means anyone can get into trading, whether you’re a casual investor or looking to build a position over time.
Fractional investing on the platform lets you buy based on a dollar amount, so you don’t have to buy whole shares or even an entire Bitcoin. For example, popular stocks like Tesla and Nvidia can cost hundreds per share, but with fractional investing, you can start with as little as $10. Time to get started!
The same goes for crypto investments. Bitcoin is currently trading around $40,000 (as of Feb ’24), but you can invest $10, $100, or any amount that suits your budget.
Understanding eToro’s Fee Structure
eToro’s trading fees for crypto trades adhere to a straightforward structure. A 1% fee is charged on each trade, alongside a spread. By definition, the spread represents the variation between an asset’s buy and sell price.
Consider this scenario: there are buy orders for BTC at $44,000 and sell orders at $44,001. In this case, the spread is $1.
However, it’s important to note that you won’t have to pay the entire dollar unless you choose to purchase a whole bitcoin.
The amount you pay on eToro with a spread can vary depending on volatility and market conditions. Assets that are more volatile may have wider spreads.
Spreads like this are frequently seen on basic trading platforms, providing a brief opportunity to secure your desired price. Without spreads, there is a risk of price fluctuations between the moment you click the buy or sell button and when your trade is executed.
The buying price you pay includes eToro’s commission and the spread. When you check out a new position in your portfolio, you’ll probably notice a loss of around 2%. That’s because selling the position also comes with a 1% fee, and you’ll sell at the market sell price, which already includes the spread.
In crypto trading, that 2% “loss” can flip around pretty fast.
CopyTrading and Smart Portfolios for crypto assets have the same fee structure.
Deposit, Withdrawal, and Trading Fees
| Crypto Trading Fees | 1% + spread |
| Stock and ETF Trading Fees | 0% + spread |
| Deposit Fees | None; conversion fees apply for non-USD deposits |
| Withdrawal Fees | $5 |
| Crypto Withdrawal Fees | Varies by network demand |
When buying Bitcoin or other crypto on the eToro platform, a 1% commission applies. However, when trading stocks and ETFs, you will only incur a market spread fee.
Moreover, eToro stands out by offering free deposits, a rarity in the industry, unlike competing platforms such as Coinbase that impose deposit fees. (Standard bank transfers typically incur no charges, though.)
While there is a withdrawal fee of $5, it is advisable to accumulate balances before making a withdrawal. This approach ensures prudence and maximizes cost-effectiveness.
- $5 on a $100 withdrawal equals 5%
- $5 on a $1,000 withdrawal equals 0.5%
- $5 on a $10,000 withdrawal equals 0.05%
TIP: There’s also a $30 minimum withdrawal to consider. At this level, the withdrawal fee adds nearly 17% to trading costs.
Fees for Storing and Transferring Bitcoin
There are no charges for Bitcoin storage on eToro, regardless of whether you keep your BTC on the platform or in the eToro Money wallet app. Please note that eToro Money is not accessible to customers in the United States.
When transferring your crypto from the platform to the wallet app, a network fee will be incurred. eToro applies actual network mining fees, with both minimum and maximum caps in place. The minimum fee is set at $1, while the maximum fee is $100.
Initially, a 2% fee is charged, which is later adjusted to reflect the true cost, while still adhering to the aforementioned caps.
It’s also worth noting that the minimum BTC withdrawal is 0.007 BTC.
| BTC Minimum Withdrawal | 0.007 BTC |
| Placeholder Fee | 2% |
| Minimum BTC Withdrawal Fee | $1 |
| Maximum BTC Withdrawal Fee | $100 |
Bitcoin mining fees can fluctuate significantly, especially during periods of high demand. It is advisable to utilize an online mining fee calculator to estimate your expenses before taking any action.
What is the Method for Calculating Bitcoin Mining Fees?
Bitcoin mining fees are determined by the size, in bytes, of transaction details. Consequently, the cost of a $10 transaction could be equivalent to that of a $10 million transaction.
To accommodate transactions, they are grouped into blocks, but space is limited. During peak network activity, mining fees for Bitcoin transactions can surge as they vie for space within these blocks.
eToro Fees Overview
When it comes to uncomplicated trades, anticipate a straightforward fee structure on eToro.
- No deposit fee (currency conversion fees may apply)
- 1% trading fee + spread for crypto trades
- 0% commission + spread for stocks and ETFs
Withdrawal costs add to your trading costs, however.
- $5 withdrawal fee (USD)
- $30 minimum withdrawal
- Network or mining fee for crypto withdrawals
Security Measures for Bitcoin Trading on eToro
Crypto as an industry remains largely unregulated, but eToro takes important steps to register with and acquire licenses from regulators in key markets.
- UK: Registered with the Financial Conduct Authority (FCA)
- Europe: Registered with the Cyprus Securities Exchange Commission (CySEC)
- Australia: Registered with the Australian Securities & Investments Commission (ASIC)
- US: Registered with the Financial Crimes Enforcement Network (FinCEN); eToro is also licensed in most US states as a money-transmitting business.
NOTE: However, trading cryptocurrencies on eToro is not regulated by any of these entities.
The platform also provides several security features and account protections.
- You can secure your account with two-factor authentication, which helps prevent unauthorized access.
- The company holds most crypto assets on the platform in cold storage, meaning the crypto wallets that hold your Bitcoin and other cryptocurrencies are not connected to the internet.
- Cash balances for US accounts are FDIC insured up to $250,000.
- US ETFs, stocks, and options are insured against broker insolvency for up to $250,000 through the SIPC.
The Role of eToro Wallet for Secure Storage
To safeguard substantial Bitcoin holdings, consider transferring your coins off the platform using eToro Money. Please note that eToro Money is not accessible to customers residing in the United States. You can also transfer your bitcoins to another wallet, including a hardware cold wallet that doesn’t connect to the internet.
Selling Bitcoin on eToro
Because eToro uses a flat percentage-based fee for crypto trades (regardless of size), you can sell as needed without impacting your trading costs.
When trading, it is crucial to take into account the minimum trade requirements. On eToro, the minimum trade amount is $10. Additionally, you have the flexibility to either sell all your holdings in an asset or just a single position.
Here’s an example:
Suppose you initiate a $25 position. The minimum trade necessitates a minimum of $10 to be maintained. Consequently, selling $20 worth of Bitcoin is not feasible as only $5 would remain, which falls short of the required amount for trading.
Take Profit and Stop Loss Orders
To sell a position or a portion of it on eToro, navigate to the Portfolio section in the left menu and choose the specific asset you wish to sell.
You have two options: an immediate sale, provided the trade adheres to the minimum trading amounts, or you can set a sell order at a price of your preference using stop-loss or take-profit orders.
By utilising stop-loss and take-profit options, you have the opportunity to trade without the need to constantly monitor your computer or phone to manage your trades.
Stop-loss orders automatically close your position to protect your trading capital.
Utilizing a trailing stop-loss order, the following arrangement safeguards your downside while securing your profits by dynamically adjusting the stop-loss as the trade’s value rises.
This intelligent approach not only protects your investments but also maximizes your potential gains.
Take-profit orders let you set a price to automatically exit the trade with a profit.
In the provided example, eToro will execute the sale of the position once its value has doubled.
To manage your order settings for each position, simply navigate to the Portfolio tab. Notably, the second order employs both a trailing stop and a take-profit order, ensuring comprehensive control and potential gains.
How Do Authorities Tax Bitcoin Trades?
Bitcoin is considered property for tax purposes in many countries, including the US. This implies that profitable trades should be reported as capital gains, while losses are treated as capital losses.
TIP: Use crypto tax software to help you report accurately – Read More…
In the US, the IRS mandates that traders report trade values and cost basis in USD. The IRS views assets held for over a year as subject to long-term capital gains rates, while short-term trades are taxed at ordinary income rates.
Fractional Bitcoin Investments
Bitcoin’s code guarantees scarcity by capping the maximum number of bitcoins at 21 million. Each of these currently trades for over $40,000.
However, on eToro, you have the flexibility to purchase as little as $10 worth. While Bitcoin’s maximum supply is limited, it is divisible, enabling you to acquire smaller amounts.
Moreover, eToro offers support for fractional shares of stocks and ETFs, further expanding your investment opportunities.
FAQs About Buying Bitcoin on eToro
Is eToro safe to buy Bitcoin?
eToro has got you covered with a solid regulatory framework. They have registered with big players like FinCEN in the US and the FCA in the UK. Plus, they’ve got your back with SIPC insurance for stocks, ETFs, and options, and FDIC insurance for US cash balances. Your trading experience is secure with eToro!
Can you buy actual Bitcoin on eToro?
Sure! When you purchase Bitcoin on eToro, you have the option to withdraw it to an external wallet. From there, you can use or send your Bitcoin to another wallet.
Can I transfer bitcoins to eToro?
At present, it is not possible to transfer bitcoins to the eToro trading platform. Nevertheless, the eToro Wallet allows you to receive bitcoins seamlessly.
How do I withdraw Bitcoin from eToro?
To withdraw Bitcoin from eToro, simply choose the BTC position from your portfolio and click on “withdraw.” Please note that only the eToro Wallet is compatible for withdrawals. Alternatively, you can sell your position and withdraw the earnings to your funding source.
How can I cash out from eToro Wallet?
To withdraw funds from your eToro Wallet, you have the option to transfer your bitcoins to another wallet or exchange. Unfortunately, at present, there is no method to return Bitcoin to the eToro trading platform to close your position.
Where does eToro store Bitcoin?
eToro securely stores the majority of crypto assets in cold storage. Cold storage refers to crypto wallets that are offline and not connected to the internet. This robust security measure ensures the safety of your digital assets.
Conclusion
eToro’s user-friendly platform is ideal for individuals looking to learn the art of investing in Bitcoin and other cryptocurrencies. With an extensive range of stocks and ETFs available, it enables the creation of a diversified portfolio to effectively manage risk. Seamlessly trade crypto alongside stocks and ETFs.
A competitive 1% trading fee ensures cost-effectiveness, while trading tools such as Copy Trading, Smart Portfolios, and a $100,000 demo account offer an opportunity to learn the ropes without being an expert trader.
Let me know what you think of eToro in the comments below!
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong
