Crypto Trading Boosts eToro Quarterly Performance

The highly active cryptocurrency market in the summer of 2021 was reflected in most success measures for eToro, the international brokerage platform. Both client onboarding and activity boomed for the second quarter, driven by retail investors’ interest in digital assets, eToro reported. 

Q2 results reflected a marked increase in cryptocurrency trading on eToro, driving commissions up 125% year-on-year. Compared to the more turbulent Q2 of 2020, eToro managed to attract another 2.6M registrations due to the outsized trading in cryptocurrency, the hottest asset class during that period. 

“We continue to see strong positive momentum and our Q2 numbers demonstrate ongoing growth in new registered users and total commissions. In line with this, funded accounts grew by 158% year on year to 2 million as of 30 June 2021,” said Yoni Assia, CEO and Co-founder of eToro.

In the past, eToro has also seen interest in single asset classes with strong concentrated trading. The latest results underline the mainstreaming of digital assets, also popularized by the Robinhood platform.

Specifically, the cryptocurrency trading commission rose by 73% to $264.2M in Q2. Trading on eToro is just a fraction of the overall reported crypto activity, but an important fully regulated hub for retail access.

The return to heightened retail activity in 2021 got a boost from improved overall market conditions, following relatively low performance in the spring of 2021. A rush to retail trading was triggered by the GameStop (GME) short squeeze, showing the potential effect of multiple retail investors to create notable market trends. 

Wrapping Up Two Years of Crypto Activity

While eToro offered BTC derivatives for years, the platform only opened a dedicated crypto platform in 2019. After initial problems with meeting heightened demand, eToro is now offering full wallet functionalities, including stablecoin options. 

The eToro brokerage created the eToroX subsidiary specifically to foster cryptocurrency trades. According to CoinMarketCap, eToroX carries more than $38M in daily volumes for 27 trading pairs. Compared to earlier unregulated crypto exchanges, this volume is still extremely slim. 

Compared to market operators like Binance International, KuCoin and others, some of the trading pairs have extremely low liquidity indicators.

Dogecoin, US Investors Drive Adoption

The eToro platform boosted its crypto investment by opening up to the US market. The Q2 rallies also coincided with the outsized interest in Dogecoin (DOGE). Currently, the US market makes up about 12% of all activity during the quarter, and that is based mostly on cryptocurrency deals and copy trading. 

Other high-volume popular assets on eToro included BTC, ETH, ADA and XRP. The selection of eToro also expanded to the most active DeFi tokens, including Compound (COMP), Aave (AAVE), Yearn.Finance (YFI) and Decentraland (MANA). 

One of the most curious additions was Shiba Inu (SHIB), the meme token built on the fame of DOGE, but with DeFi functionalities and an incentive to hold the asset. 

Another trend adopted for eToro traders is the opportunity to stake ETH for the upcoming Eth 2.0 launch. Staking ETH means locking up the assets in a smart contract, with no current ability to withdraw before the Ethereum network introduces a move to proof-of-stake. 

The outstanding results of Q2 are viewed with some caution by eToro, with the expectation for slower market conditions as Q3 wraps up. Despite the significant spike in cryptocurrency activity, the tides may shift in a highly volatile market.

Most Copied Trader Strong on BTC

The current leader in copied trades, Jay Smith, is also a strong proponent of both BTC and other blockchain-based projects. Smith recently went with a strongly bullish prediction on BTC price moves. 

It's funny how crypto goes.

I predicted 100k btc and 10k eth by the end of the year back in Jan.

By June I was being called out on it and asked if my view changed.

I said no.

Now those same people are back on the hype train.

So easily scared.

— Jay Smith (@jaynemesis) August 20, 2021

For eToro, BTC was the first digital asset to be added in 2014. Since then, the platform offers a selection of 29 digital coins and tokens, with the option to withdraw some of the assets to a personally controlled wallet. 

BTC trading has attracted significant retail buying in the past months, mostly boosted by expectations of another upward move to a higher valuation. The expansion of eToro to the US market has added to the trend.

Can eToro Boost Altcoins

Presence on eToro amplifies the impression of an altcoin. Assets like Enjin Coin (ENJ) are gaining exposure to a wider audience of former stock and forex traders. 

Where to buy Enjin: ENJ up 59% since eToro listing | CRYPTO
An eToro listing has done wonders for Enjin Coin, which has risen by 11% since yesterday#cryptohttps://t.co/UimwT1Qiyf #cryptocurrency #crypto #altseason #defi #enrichedfeed #smartcontracts #furucombo #dex #cex

— EFeeds (@EnrichedFeed) August 24, 2021

Currently, ADA remains the most significant outlier, offering the potential for growth and high visibility. During the most recent rally, ADA almost reached peaks above $3, only to slide back to $2.60. The asset is one of the most significant success stories of 2021, starting off from lows of $0.03 during the bear market.

ADA/USD is also currently the most active pair on eToroX exchange, with the exception of BTC trades. Still, ADA only enjoys about $13M in activity per day, out of more than $32B reported volumes on overall digital asset markets.