Good Choice for Beginners!
Free Trading Education, Free Demo Account!
Get a Sign-Up Bonus Now!
2nd in our ranking!
Pay Attention to These 7 Bitcoin Scams
Bitcoin – the possible Pandora’s Box of the currency world – has never been short of controversy. Whether it be aiding the black market or scamming users out of millions, bitcoin is no stranger to the front page.
Still, the jury is out on the legality and usefulness of bitcoin – leaving it in a proverbial grey area. Bitcoin’s price has fluctuated throughout its history, falling and rising, currently hovering near $10,000. Perhaps you’ve found bitcoin while it looks to be on the rebound and find yourself interested in it as an investment.
However, there have been several legitimate bitcoin scams that have become infamous, and you need to know about them – but, what are the top 7 bitcoin scams? And how can you avoid them?
What Is a Bitcoin Scam?
For most cases, it may be pretty obvious what a scam is – but with bitcoin, and cryptocurrency in general, things become murkier. Bitcoin itself is an unregulated form of currency that essentially is a mere number that is only given value because of an agreement. It’s basically like a moneybag with a lock on it – the code of which is given to the recipient of the bitcoin (an analogy drawn by Forbes in 2020).
Bitcoin scams have been famously criminal and public in nature. With no bank as a middleman in exchange, things become more complicated; so hackers and con men have had a heyday.
Top 7 Bitcoin Scams
There have been (and undoubtedly will be) nearly countless bitcoin scams, but these frauds make the list of the top 7 worst bitcoin scams to date. Take note.
1. Malware Scams
Malware has long been the hallmark of many online scams. But with cryptocurrency, it poses an increased threat given the nature of the currency in and of itself.
Recently, a tech support site called Bleeping Computer issued a warning about cryptocurrency-targeting malware in hopes of saving customers from sending cryptocoins via transactions, reported Yahoo Finance.
“This type of malware, called CryptoCurrency Clipboard Hijackers, works by monitoring the Windows clipboard for cryptocurrency addresses, and if one is detected, will swap it out with an address that they control,” wrote Lawrence Abrahams, computer forensics and creator of Bleeping Computer.
The malware, CryptoCurrency Clipboard Hijackers (which reportedly manages 2.3 million bitcoin addresses) switches addresses used to transfer cryptocoin with ones the malware controls – thus transferring the coins to the scammers instead. And, according to Asia Times, even MacOS malware has been connected to malware scams involving cryptocurrency investors using trusted sites like Slack and Discord chats – coined “OSX.Dummy.”
Good Choice for Beginners!
Free Trading Education, Free Demo Account!
Get a Sign-Up Bonus Now!
2nd in our ranking!
2. Fake Bitcoin Exchanges – BitKRX
Surely one of the easiest ways to scam investors is to pose as an affiliate branch of a respectable and legitimate organization. Well, that’s exactly what scammers in the bitcoin field are doing.
South Korean scam BitKRX presented itself as a place to exchange and trade bitcoin, but was ultimately fraudulent. The fake exchange took on part of the name of the real Korean Exchange (KRX), and scammed people out of their money by posing as a respectable and legitimate cryptocurrency exchange.
BitKRX claimed to be a branch of the KRX, a creation of KOSDAQ, South Korean Futures Exchange, and South Korean Stock Exchange, according to Coin Telegraph.
BitKRX used this faux-affiliation to ensnare people to use their system. The scam was exposed in 2020.
3. Ponzi Scheme – MiningMax
“Ponzi bitcoin scam” has got to be the worst combination of words imaginable for financial gurus. And, the reality is just as bad.
Several organizations have scammed people out of millions with Ponzi schemes using bitcoins, including South Korean website MiningMax. The site, which was not registered with the U.S. Securities and Exchange Commission, promised to provide investors with daily ROI’s in exchange for an original investment and commission from getting others to invest (basically, a Ponzi scheme). Apparently, the site was asking people to invest $3,200 for daily ROI’s over two years, and a $200 referral commission for every personally recruited investor, reports claim.
MiningMax’s domain was privately registered in mid-2020, and had a binary compensation structure. The fraudulent crypto-currency scam was reported by affiliates, resulting in 14 arrests in Korea in December of 2020.
Korea has long been a leader in technological developments – bitcoin is no exception. However, after recent controversy, it seems as though this is changing.
“But a lot of governments are looking at this very carefully,” Yoo Byung-joon, business administration professor at Seoul National University and co-author of the 2020 research paper “Is Bitcoin a Viable E-Business?: Empirical Analysis of the Digital Currency’s Speculative Nature,” told South China Morning Post in January. “Some are even considering putting their currencies on the blockchain system. The biggest challenge facing bitcoin now is the potential for misuse, but that’s true of any new technology.”
4. Fake Bitcoin Scam – My Big Coin
A classic (but no less dubious) scam involving bitcoin and cryptocurrency is simply, well, fake currency. One such arbiter of this faux bitcoin was My Big Coin. Essentially, the site sold fake bitcoin. Plain and simple.
In early 2020, My Big Coin, a cryptocurrency scam that lured investors into sinking an alleged $6 million, was sued by the U.S. Commodity Futures Trading Commission, according to a CFTC case filed in late January.
The CFTC case further details that the suit was due to “commodity fraud and misappropriation related to the ongoing solicitation of customers for a virtual currency known as My Big Coin (MBC),” further charging the scam with “misappropriating over $6 million from customers by, among other things, transferring customer funds into personal bank accounts, and using those funds for personal expenses and the purchase of luxury goods.”
Among other things, the site fraudulently claimed that the coin was being actively traded on several platforms, and even mislead investors by claiming it was also partnered with MasterCard, according to the CFTC case.
Those sued included Randall Carter, Mark Gillespie and the My Big Coin Pay, Inc.
5. ICO Scam – Bitcoin Savings and Trust and Centra Tech
Still other scammers have used ICO’s – initial coin offerings – to dupe users out of their money.
Along with the rise in blockchain-backed companies, fake ICOs became popular as a way to back these new companies. However, given the unregulated nature of bitcoin itself, the door has been wide open for fraud.
Most ICO frauds have taken place through getting investors to invest in or through fake ICO websites using faulty wallets, or by posing as real cryptocurrency-based companies.
Notably, $32 million Centra Tech garnered celebrity support (most famously from DJ Khaled), but was exposed for ICO fraud back in April of 2020, according to Fortune. The company was sued for misleading investors and lying about products, among other fraudulent activities.
The famous DJ wrote his support in a caption on Instagram back in 2020.
“I just received my titanium centra debit card. The Centra Card & Centra Wallet app is the ultimate winner in Cryptocurrency debit cards powered by CTR tokens!” Khaled wrote.
The U.S. Securities and Exchange Commission even issued a warning in 2020 about ICO scams and faux investment opportunities, brought on by a slew of celebrities who promoted certain ICOs (like Paris Hilton and Floyd Mayweather Jr. to name a few).
“Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion,” the SEC wrote in an Investor Alert in 2020. “A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.”
Another example is Bitcoin Savings and Trust, which was fined $40.7 million in 2020 by the SEC for creating fake investments and using a Ponzi scheme to scam investors. According to Coin Telegraph, Trenton Shavers, the organization’s leader, allegedly scammed investors into giving him 720,000 bitcoins promising a 7% weekly interest on investments – which he then used to pay back old investors and even fill his personal bank accounts.
6. Bitcoin Gold Scam – mybtgwallet.com
Nothing catches the eye of the naïve quite like the promise of gold – bitcoin gold, of course.
That is exactly what mybtgwallet.com did to unsuspecting bitcoin investors.
According to CNN, the bitcoin gold (BTG) wallet duped investors out of $3.2 million in 2020 by promising to allow them to claim their bitcoin gold. The website allegedly used links on a legitimate website (Bitcoin Gold) to get investors to share their private keys or seeds with the scam, as this old screenshot from the website shows.
Before the scam was done, the website managers (slash scammers) was able to get their hands on $107,000 worth of bitcoin gold, $72,000 of litecoin, $30,000 of ethereum, and $3 million of bitcoin, according to CNN.
Bitcoin Gold, the site’s wallet used in the scam, began investigating shortly after, but the site remains controversial. Still, firm released a warning to bitcoin investors.
“It’s worth reminding everyone that it will never be truly safe to enter your private key or mnemonic phrase for a pre-existing wallet into any online website,” Bitcoin Gold wrote. “When you want to sweep new coins from a pre-fork wallet address, best practice is the same as after other forks: Send your old coins to a new wallet first, before you expose the private keys of the original wallet. Following this basic rule of private key management greatly reduces your risk of theft.”
7. Pump and Dump Scam
While this type of scam is certainly not relegated to just bitcoin (thank you for the education, “The Wolf of Wall Street”), a pump-and-dump scam is especially dangerous in the internet space.
The basic idea is that investors hype up (or “pump up”) a certain bitcoin – that is usually an alternative coin that is very cheap but high risk – via investor’s websites, blogs, or even Reddit, according to The Daily Dot. Once the scammers pump up a certain bitcoin enough, skyrocketing its value, they cash out and “dump” their bitcoin onto the naïve investors who bought into the bitcoin thinking it was the next big thing.
Bittrex, a popular bitcoin exchange site, released a set of guidelines to avoid bitcoin pump-and-dump scams.
While “stackin’ penny stocks” may sound like an appealing way to earn an extra buck (thanks to its glamorization by Jordan Belfort), messing in bitcoin scams is nothing to smirk at.
How to Avoid Bitcoin Scams
With the inevitable rise of bitcoin in current and coming years, it is becoming increasingly important to understand and be on the lookout for bitcoin scams that could cost you thousands. As more people become interested in Bitcoin, more people are also likely to try and pull off a scam.
There is no one formula to avoiding being scammed, but reading up on the latest bitcoin red flags, keeping information private, and double checking sources before investing in anything are good standard procedures that may help save you from being duped. Cryptocurrency can be a confusing topic even for the experienced Bitcoin enthusiast, so the more you read up on the world of Bitcoin, the more prepared you can be. After all, knowledge is power.
eToro Review: The Social Trading & Investment Platform
While eToro is a key player in the world of CFDs and cryptocurrency trading, the company also offers a lot more than this now. They have led the fintech revolution for over a decade and built up a reputation as the leading social trading platform in the world.
The company began as a general trading platform but has added cryptocurrency and other trading instruments to keep up with changing markets and growing demands. They are one of the pioneers in adding social features to their platform in the form of CopyTrading and CopyPortfolios.
Today, there are over 6 million users registered on eToro, securing it’s status as an industry leader – Read on for our comprehensive review.
Risk Warning: 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.
eToro at a Glance
|Regulation||FCA (UK), ASIC (Australia), CySEC (Cyprus)|
|Minium Initial Deposit
|Asset Coverage||CFDs, ETFs, Forex, Cryptocurrency, Shares, Commodities, Indices|
|Trading Platforms||Proprietary Web, Mobile Apps|
What Is the History of eToro?
eToro actually began back in 2007 with three entrepreneurs who wanted to make trading more accessible for every day users.
At the same time, they wanted to reduce dependency on banks and other traditional financial institutions. eToro started off as an online trading platform with graphs representing financial instruments and an intuitive interface.
In 2009, eToro launched the trading platform, WebTrader, with a range of professional tools for traders of all skill levels.
75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
- A big step forward came in 2020 with OpenBook, the first social trading platform in the world. This included the then-new CopyTrader feature, which let anyone copy successful traders.
- In 2020, eToro added stocks to its other assets, like currencies and commodities.
- The eToro mobile app launched in 2020 for both Android and Apple, expanding the reach of the platform. This is also when eToro dipped into crypto, making it possible to trade Bitcoin via CFDs.
- In 2020, the platform updated the interface for an even more innovative and intuitive experience.
- In 2020, it added CopyPortfolio, managed portfolios that bundle various assets or top traders within a market strategy.
- In January of 2020, eToro expanded its reach in the world of cryptocurrency by adding support for trading crypto to the platform. It began with a range of popular cryptocurrencies, including Ethereum, Litecoin, and XRP.
- In 2020 they launched eToroX, a full crypto to crypto exchange.
Which Cryptocurrencies Does eToro Support?
Compared to other platforms, the options for supported cryptocurrencies on eToro are relatively limited.
This is a result of its nature as a general trading platform as opposed to one focused solely on cryptocurrency.
Even so, you can short or own the most popular cryptocurrencies. Supported options include Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, and Ripple.
Cryptoassets are highly volatile unregulated investment product. No EU investor protection. Your capital is at risk. Indicative prices; current market price is shown on the eToro trading platform
What Sets eToro Apart from Other Platforms?
One of the biggest ways that eToro stands out from other platforms is the sheer number of investment and trading options available.
Thanks to the numerous ways to invest and trade, users can take advantage of the same platform for their cryptocurrency trading needs as for traditional assets.
The social elements of eToro also make it unique. An example is CopyPortfolios, which is a long-term thematic investment in the form of a managed portfolio bundling assets and top traders with a predetermined strategy. The ability to copy the investments of successful traders is also innovative, as is the Popular Investor program.
What Trading Tools Does eToro Offer?
This platform aims to educate traders as well as provide them with a platform for investment.
Upon registration, eToro users get “virtual-money accounts” with $100,000 so they can work on strategies and skills before investing any real money.
It also provides multiple other tools to help with actual trading, such as an economic calendar. Simply input the dates and time zone you want to look at and the assets you trade. The calendar will then display how events are likely to impact your assets.
Additionally, it provides regular market analyses that include great detail as well as quick overviews, so you can utilize as much or as little information as you want.
Every asset which is tradable on the platform has it’s own page where you can view detailed information, news, charts and research.
What Are CFDs?
A CFD, or contract for difference, is a type of derivative trading. With a CFD, investors can speculate on whether fast-moving global financial markets will rise or fall. This can be done with cryptocurrencies as well as indices, shares, fiat currencies, treasuries, and commodities.
The important thing to note about CFD trading is that you will not be buying or selling the asset underlying it, in this case, cryptocurrency. Instead, you sell or buy a certain number of units for that instrument based on your prediction of if the price will rise or fall.
When the instrument moves in your favor, you get multiples of the existing CFD units you already sold or bought. You make a loss for every point it moves against you. CFDs require caution since it is possible for losses to exceed deposits.
You can read more about CFDs in our Beginner’s Guide here.
Highly volatile unregulated investment product. No EU investor protection. Your capital is at risk.
On eToro, CFD trading and cryptocurrency go hand in hand. As mentioned earlier, eToro first entered the world of cryptocurrency by offering Bitcoin trading via CFDs in 2020, making it one of the earliest players in the world of crypto investments.
CFD trading continues to play a key role on eToro since many of the trades involving crypto are still CFDs instead of dealing with the actual asset.
Starting on Sept. 3, 2020, those who invested in the BUY position for crypto on eToro actually own the asset underlying the transaction. Before this, they owned a CFD, not the asset. Additionally, eToro offers actual cryptocurrency trading. If you choose to open short or SELL positions for cryptocurrencies on eToro, this is still a CFD position.
What Are CopyPortfolios?
CopyPortfolios were added to the eToro platform last year. This feature is available for cryptocurrency trading as well as traditional fiat trades. This creates a single tradeable asset that is made up of carefully selected assets or traders of a predetermined strategy.
The eToro Investment Committee composes the CopyPortfolios and rebalances them periodically. There are several cryptocurrency CopyPortfolios available for investors to choose from.
One of these is simply called “Cryptocurrency” and delivers exposure to Ethereum and Bitcoin.
In the cryptocurrency bull run of May 2020, the fund had a 66 percent increase. Within the first three months, that fund generated over 125 percent in profits. Another option is called “Crypto CopyPortfolio.”
This is a more recent CopyPortfolio made up of a balanced crypto portfolio containing Bitcoin, Ethereum, Ethereum Classic, Litecoin, Dash, and Ripple.
What Is CopyTrading?
Another exciting option on eToro that you can use for crypto and fiat investments is CopyTrading.
Copy trading is an innovation that allows users to look through the track record of other traders and copy them, which means they will mirror their trades.
Traders have the ability to become “Popular Investors” if they have a low-risk score and deliver consistent returns.
They then receive rewards for sharing wisdom. By taking advantage of CopyTrading and copying an investor who includes cryptocurrency in your portfolio, you can get exposure to the market without having to do too much research yourself.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This is not investment advice.
Who Can Use eToro?
eToro can be used by anyone, as long as it is legal to do so in their country. eToro keeps a running list of countries where the platform is blocked due to changes in the regulations that conflict with trading laws.
This means that those in the United States, Canada, Cuba, Japan, North Korea, Iran, Syria, Turkey, Serbia, Albania, and Sudan cannot legally use eToro.
Does eToro Have a Minimum Trade Size?
eToro prides itself on offering tools that investors and traders of all levels of experience can take advantage of, so it tries to limit the use of minimum trades.
- Even so, you must have $200 to participate in CopyTrading and make a minimum investment of $5,000 for CopyPortfolios.
- The minimum quantities for manual positions are based on the instrument. For currencies (such as cryptocurrencies) and commodities, it is just $25.
- For stocks, it is $50.
- Finally, for ETFs and indices, it is $200.
For those who registered on April 2, 2020, or after, the size of a minimum trade depends on exposure, in the form of leverage times the invested amount. For cryptocurrencies, this total minimum amount is $200.
The minimum for ETFs and stocks is $500, for commodities is $2,500, and for indices and Forex is $5,000.
As an example of this exposure-related policy, if you open a crypto trade with a leverage of x1, you must invest at least $200. If, however, you chose to invest $100, you must have a minimum leverage of x2.
As an exchange, eToro makes its profits from the various fees that it charges. On eToro, no fees are charged when opening a position, instead generating the fee based on the spread. It has a list of minimum spreads for each cryptocurrency, and those rates are not guaranteed.
The team points out that the spread can vary based on liquidity and market conditions.
The daily break spreads are as follows: 1.5 percent for BTC, 5 percent for BCH, 3 percent for DASH, 2 percent for Ethereum, 5 percent for ETC, 3 percent for LTC, 5 percent for NEO, 5 percent for XLM, and 3 percent for XRP.
|Instrument||Market Hours||Daily Break||Spread||SELL||BUY|
Because of the nature of cryptocurrency trading, it is available 24/7, and there are no fees for overnight or weekend trades. Instead, eToro only charges fees for users who hold leveraged Ethereum or BTC positions or for shorting cryptocurrencies. The team does point out that the various fees are subject to change.
eToro Customer Reviews & Reputation
Users and reviewers of the platform generally agree that eToro is very easy to use. It was designed to be intuitive, so those without trading experience could get the information they need and make trades.
You can use the platform on PCs, Macs, Android, or iOS devices, always taking advantage of its intuitive functionality and readily displayed information regarding cryptocurrencies and other assets via graphs and more.
In general eToro has a good reputation online, the company is large and well established so you can be sure your funds are safe there. Complaints from people online are generally about traders they have copied not performing as well as they thought they would.
This isn’t the fault of the traders themselves, trading is a complicated business as everyone experiences losses as well as gains.
Other issues revolve around the fact that eToro advertises heavily that you can buy Cryptos with them, when in fact you don’t actually hold the assets themselves. This is the same for all brokers of this type, if you want to physically own the crypto asset then you will need to purchase them on an exchange that offers this, like Coinbase or Binance.
How Do You Deposit and Withdraw Money on eToro?
There are multiple deposit methods for eToro, so you can choose the one that best meets your needs, keeping in mind that different methods have varying minimum deposits.
You can choose to deposit via wire transfers, bank transfers, Visa, MasterCard, NETELLER, PayPal, Yandex, Webmoney UK, Skrill, and others.
To withdraw, you must fill out a form and then typically receive the money via PayPal, a bank transfer, or your credit or debit card. To withdraw, you will need a copy of your signature, color passport copy, and proof of address.
eToro has recently added approximately 35 new fiat pairs to its platform which sees a total of around 44 trading pairs available to its users. The new pairs cover a number of different regions and currencies and are aimed at the inhabitants of countries such as Canada, Australia, and Japan. The updated pairs are as follows:
- Australia BTC/AUD, ETH/AUD, XRP/AUD, ETC/AUD, BCH/AUD, LTC/AUD,
- Canada BTC/CAD, ETH/CAD, XRP/CAD, ETC/CAD, BCH/CAD, LTC/CAD
- Japan ETC/JPY, BCH/JPY, LTC/JPY
- New Zealand BTC/NZD, BCH/NZD, ETH/NZD, ETC/NZD, LTC/NZD XRP/NZD
- Switzerland BTC/CHF, ETH/CHF, XRP/CHF, LTC/CHF, BCH/CHF, ETC/CHF
- United Kingdom BCH/GBP, ETC/GBP, LTC/GBP, XRP/GBP
- The EU BCH/EUR, ETC/EUR, LTC/EUR, XRP/EUR
Furthermore, eToro has officially announced a cryptocurrency focused trading platform aimed at customers in the U.S., alongside a crypto wallet, and integrated mobile app which allows cryptocurrency purchases by credit card.
The service was unveiled in May and enables U.S. customers from 32 states and territories to trade a growing number of different cryptocurrencies including popular assets such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP, Dash (DASH), Neo (NEO), and EOS.
At the same time, the multi-signature crypto wallet supports six cryptocurrencies, namely Bitcoin (BTC), Bitcoin cash (BCH), Ethereum (ETH), Litecoin (LTC), Stellar (XLM) and XRP with additional currencies set to be added in the future.
The team have also announced that their cryptocurrency mobile wallet has been made available for both iOS and Android device users.
Existing eToro users are currently able to log into the wallet directly in order to transact and store cryptocurrencies, while in-wallet asset conversion is also possible with just few clicks, additionally, funds can also be received and sent out by sharing the wallet address or using a QR code.
The eToro Wallet allows users to:
- Manage and store multiple cryptocurrencies
- Exchange crypto for crypto
- Transfer cryptos from their eToro accounts (limited to certain coins and to Gold accounts and above)
How to Buy Crypto with a Credit Card
eToro customers can also buy cryptocurrencies directly from the eToro wallet by using a credit card. The investment platform has partnered with well renowned third-party payment provider Simplex, with allows eToro to integrate Visa and MasterCard payments.
Here’s how to buy some cryptocurrency using your credit card:
- Open your eToro Wallet
- Click on the “BUY CRYPTO” section of the wallet and select your preferred coin and amount that you would like to buy
- Enter your payment details into Simplex’s billing form.
Upon successfully completing the process, your purchased coins will be transferred to your eToro wallet.
It’s important to note that Simplex can choose to immediately approve or decline your request, as well as request further documentation or proof of identity. These may include official government issued documentation or a selfie photo. This service is also subject to the following fees and limitations.
eToro Wallet Fees
Fiat to Crypto Conversion Fees
- eToroX fee 1%
- Simplex fee 4%
|Currency||Min transaction||Max transaction||Max / Day||Max / Month|
The actual market rate is determined by eToroX once the transaction is approved by Simplex, and blockchain fees are deducted from the crypto purchased in addition to the above fees and are applied to every crypto transaction.
It’s worth noting that additional fees may also be accrued as a result of charges applied by your bank or credit card issuer.
These may include cash advance or foreign transaction fees to your card transactions, and any transactions carried out will appear on your credit card or banking statement as eToroX LTD, with the credit card descriptor being Simplex_eToroX, however, a confirmation email will also be sent Simplex.
Any pending payment may be cancelled, with customers advised to open a ticket directly on the Simplex website or to use the Live Chat feature on the bottom right side of the Simplex.com website.
It’s also important to note that once a payment has been approved it can’t be cancelled. The approval process is actually authorised by Simplex, and as a result, questions about the transaction process should be first directed to the Simplex customer service team. However, the eToro Customer Service team is also available to deal with any issues.
eToroX, the blockchain subsidiary of eToro’s more traditional investing platform has officially launched in Gibraltar and is being regulated by the Gibraltar Financial Services Commission (GFSC). The exchange aims to cater to specialist crypto traders and incorporate many of the features found on their social trading platform.
The crypto to crypto exchange features an intuitive user interface, a mobile wallet app, is regulatory compliant, and makes use of cutting edge security protocols, and aims to provide crypto enthusiasts in a number of region with enhanced trading options.
The platform originally launched with a limited number of cryptocurrencies, however, 16 digital assets and 37 crypto-to-fiat pairs are currently available, and eToroX also incorporates eight branded stablecoins that allow traders to protect themselves from the volatility of the market without having to “cash out” into fiat.
The eToro-branded tokens pegged to fiat currencies include the eToro United States Dollar (USDEX), eToro Japanese Yen (JPYX), eToro Euro (EURX), eToro Pounds Sterling (GPBX), eToro Australian Dollar (AUDX), eToro Canadian Dollar (CADX), eToro New Zealand Dollar (NZDX), and the eToro Swiss Franc (CHFX).
In addition to these stablecurrencies, digital assets pegged to the price of commodities also feature and these include the GOLDX and SLVRX coins which respectively remain pegged to the prices of gold and silver.
The inclusion of these digital assets help eToroX to remain a crypto to crypto exchange, and more familiar cryptocurrencies such as Bitcoin (BTC), Bitcoin cash (BCH), Ether (ETH), Litecoin (LTC), Dash (DASH), and XRP also feature with more cryptocurrencies, stablecoins, and tokens scheduled to be added in the coming weeks.
Exchange Fees and Limits
eToroX doesn’t charge for deposits, and withdrawal fees are as follows:
|Currency||Quick withdraw limit||Withdrawal fee|
The exchange uses a tiered approach with regards to trading fees and the fees for all transactions (under a monthly volume of $100,000) are calculated according to Tier 1.
When the monthly trading volume grows beyond Tier 1 (over $100,000), a rebate will be applied during the first week of the month, and depending on the Tier Level, the rebate will be calculated based on the percentages in the following table.
- The calculation will be done for each calendar month.
- The rebate will be given in ETH
- The Rebate will be given during the 1st week of the month.
eToroX also incorporates Maker and Taker fees, and the former are charged for trades where Maker orders add liquidity to the exchange, while Taker orders remove liquidity from the order book and incur their own charges.
As a result, Maker fees are lower in comparison due to these orders helping the exchange to remain liquid.
An example of a Maker trader order includes placing an order for pending execution, such as a limit order which is not automatically filled (partially or fully).
This action helps “make” the market and adds liquidity to the order book, while a Taker order can take the form of placing an immediate order that doesn’t go on the order book, by being filled partially or fully for example. This type of activity “takes” liquidity off of the order book.
How Secure is eToroX?
The exchange incorporates a number of cutting edge security protocols and these include data encryption by default, with a dedicated secured mechanism being used to prevent CSRF attacks.
In addition, the team have developed their own backlog analytic mechanism, based on N.N machine learning algorithm which assists in decision making, and incorporate multiple PT and Code reviews as well as a bug bounty program.
User accounts are further secured as all eToroX customers are required to complete Level 3 Identity Verification, and updating financial account information requires dual-process verification.
Furthermore, the platform makes use of two factor authentication (2FA), limits login attempts and uses whitelisting attribution models to prevent automation attacks.
More stringent security examples include all employee workstations being protected and verified based on multiple security mechanisms that include deception and traps, while the exchange’s custody solution is based on a three level military grade FIPS140 custodian process with multi separation between the different environments.
These include a warm environment, or process engine secured solution, a cold, secured isolated gap environment, and a deep, military grade secured isolated environment.
On top of this, eToro has been operating in Fintech since 2007 and has established regulated entities in Cyprus, UK, USA, Australia, and South Africa, with Gibraltar now becoming its sixth jurisdiction.
The Government of Gibraltar and the Gibraltar Financial Services Commission (GFSC) have set out regulations covering distributed ledger technology (DLT) businesses and eToroX operates under the framework administered by the GFSC.
The company is one of the more transparent in the cryptocurrency sector, and ETORO X LIMITED is a limited liability company incorporated in Gibraltar with a registration number 116348, and a registered office at 57/63 Line Wall Road, Gibraltar.
The company is authorized by the GFSC as a Distributed Ledger Technology Provider under the Financial Services (Investment and Fiduciary Services) Act, with a license number of FSC1333B.
Gibraltar’s regulatory requirements ensure that each new account must be verified as part of the registration process, and the exchange aims to simplify the verification process as much as possible.
After submitting all your information and uploading all the necessary documents, it can take up to two business days to verify your account.
New users are required to upload documents to help prove their identity and residence, and the following documentation will be asked for.
Proof of Identity (POI) Document
This POI document must include your name, date of birth, a clear photo, the issue date and expiry date of the document. Accepted forms of POI documents include a passport, a government-issued ID or driving license.
Proof of Identity and Selfie (POIS)
It’s necessary to upload a selfie that includes you holding the proof of identity document you have uploaded.
Proof of Address (POA) Document
The POA document must include your full name, address and issue date, and also feature the name or logo of the company that issued the document. The POA documents must be no older than 6 months and all four corners of the document must be visible.
Your POA document can be one of the following:
- Bank Statement
- Utility Bill: Electricity, Water or Gas
- Tax: Council, State or Country Tax Bill
The last step in the verification process involves completing a financial questionnaire which covers your financial suitability for investing. The questionnaire is made up of nine 9 questions and takes just a few minutes to complete.
How beginner friendly in eToroX?
As with any trading platform, eToroX takes some getting used to, however, the learning curve will be steeper for anyone completely new to the world of cryptocurrency trading.
In order to try and offset this, the team have a Help Section which aims to answer the most common questions, and can be contacted by their [email protected] email address.
The team can also be contacted via their Twitter account, Telegram group, and Facebook page. In addition to the Help Section, eToroX also aims to educate its users and incorporates a Blockchain Academy and Glossary Section which include a range of clearly written guides and definitions that help users to both navigate the platform and gain a better understanding of blockchain technology.
Depending on your background, the more limited selection of trading pairs should make it easier for new entrants to the market to start trading on the platform, while the unique selection of stablecoins should also help newer traders to gain an understanding of how to make profitable trades when dealing with digital assets.
eToro is in competition with our similar brokers which have covered before, as follows:
Is eToro Safe?
To provide users with peace of mind, eToro takes steps to provide security. The company as a whole is fully regulated and adheres to guidelines of FCA and CySEC. To help traders make responsible decisions, it offers a range of tools for all experience levels, such as guidance for the first steps and risk-management features.
eToro also takes precautions to ensure the funds and personal information of clients are safe. Traditional funds remain secure in European banks of tier 1.
With all that in mind, you should remember that there are no regulations for cryptocurrencies. Because of this, if you engage in cryptocurrency trading or other crypto-related investments, there is no insurance from the investor compensation schemes within the UK or Cyprus.
The lack of regulations also means that if you have a complaint, you cannot file it with your financial ombudsman service.
Despite this, eToro takes pride in working to resolve issues as seamlessly as possible. In addition, there are numerous social platforms where you can register complaints, which may influence other users.
Although eToro focuses on more than just cryptocurrency trading, it is a useful platform for those who invest in cryptocurrency or trade it.
The additional features of eToro are what give it an edge, such as CopyPortfolios and various graphs. The platform is also highly intuitive, something that will appeal to everyone.
While eToro will not be ideal if you want to trade less-popular cryptocurrencies, it is an excellent option for those who only care about the major ones or who want to use the same platform for both fiat and crypto trades.
It’s also a great platform for trading regular stocks and Forex or just invest in pre-built portfolios in different industries.
This review was updated with the launch of eToroX, Cryptocurrency investors now have the ability to purchase and hold crypto assets directly. This is a great addition to the platform and positions them well within the space now.
We have used eToro for years now and have not had any problems with them, deposits and withdrawals are processed quickly and reliably so you won’t have to worry about the safety of your funds.
eToro have proven themselves trustworthy within the industry over many years and come highly recommend – we recommend you try them out.
Risk Warning: 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.
This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendations.
The 7 Best Places to Buy Bitcoin of 2020
Get in on the latest craze of digital currency
We are committed to researching, testing, and recommending the best products. We may receive commissions from purchases made after visiting links within our content. Learn more about our review process.
Bitcoin took the world by storm as it rocketed from obscurity to nearly $20,000 in value per coin in 2020. The cryptocurrency markets have calmed down a bit since that record high, but many Bitcoin evangelists still claim Bitcoin to be the currency of the future. Follow along to learn more about how Bitcoin works and the best places to buy Bitcoin.
First of all, need some background information about what Bitcoin is? It’s a digital currency used mostly for online purchases and as an investment, albeit a very risky one. It is not sponsored by any government. Instead, it works through a system where people in the Bitcoin community can earn coins from “mining,” or using their computer to complete calculations. You can also buy them with dollars or nearly any other currency.
Bitcoin is highly volatile and not a place to invest funds you can’t lose. While there are some stories of people making a fortune on Bitcoin in 2020, many people lost as it fell from its peak. Some people think it is going to be worth $1 million or more while others, including Warren Buffett and JP Morgan Chase CEO Jamie Dimon, call the entire system a fraud ready to fall.
Still interested in getting a piece of the Bitcoin pie? Here are some pointers: When buying Bitcoin, you will need a place to store them. This can be an online digital wallet attached to the account where you buy and sell, a program on your computer or a physical device you plug into your computer.
You can transfer Bitcoin and use them for purchases at some rare stores on and offline. But when transacting in Bitcoin, beware of large transfer fees when going back and forth between coins and other currencies and even transferring to other digital wallets.
So, where can you buy Bitcoin? Read on to find the best places to pick up Bitcoin today.
Best Overall: Coinbase
Coinbase is the biggest and most respected Bitcoin platform in the United States. It offers both an exchange and wallet in one, making it one of the easiest places to start with Bitcoin. Coinbase also supports Bitcoin Cash, Ethereum and Litecoin.
Once you sign up and connect your bank account, you can easily transfer funds in and out of your account and convert them to Bitcoin and back to dollars at will. Coinbase charges a variable percentage fee of one percent for U.S. transactions ($1 min, $50 max) from a bank account or Coinbase USD wallet. Purchases with a credit or debit card add on a 2.49 percent fixed fee.
The Coinbase wallet is very secure, accessed through the Web app or mobile app, utilizes two-factor authentication and keeps redundant digital and paper backups of data “in safe deposit boxes and vaults around the world.” Plus, cash balances are insured up to $250,000 against theft or a breach in online storage. Further, Coinbase holds 98 percent of customer currencies offline to keep them safe from malicious hackers. This is further evidence to why Coinbase is a leader in digital currencies in the United States.
Best for Low Cost: Robinhood
Robinhood started as a fee-free stock brokerage and recently expanded into the world of digital currencies. The best part: No fees! You can buy and sell Bitcoin and other digital currencies completely fee-free on this platform. Since February 2020, Robinhood supports Bitcoin and Ethereum trades and market data for another 15 currencies. Robinhood Crypto is technically a separate account from a Robinhood stock account. Crypto accounts support market and limit orders.
Your coins are stored in the same Robinhood account you use for your stocks and share a login. Robinhood is mobile first and just recently added a Web version, so it is best for people comfortable managing money from their phone or tablet. While you may need to login on the small screen to access your account, you can’t beat free!
The biggest downside is that Robinhood only works in 16 states for cryptocurrency trades, but it plans to add more in the future. But if you do live in one of those states, Robinhood Crypto is a great option to get started in Bitcoin or Ethereum trading.
Best for Versatility: Square Cash
This is another mobile app where you can buy and sell Bitcoin with no fees. The Cash app is already great for sending money to family and friends for free (similar to Venmo). But adding in free Bitcoin buying and selling puts the Cash app near the top of the places to buy Bitcoin list.
The Cash app comes from Square, the company that makes those mobile credit card readers. Square is a huge financial technology company that includes many other services. Bitcoin is just a small piece of what they do. But with no fees, the price is right.
Unlike some digital wallets, you don’t hold your Bitcoin outside of Square, it is held in your Square Cash account on your behalf to sell or withdraw. But if you do want to send your coins to another wallet, Square does offer that feature. Square limits purchases at $10,000 per week, but there is no limit to what you can sell.
Best for Low Rates in Other Currencies: Binance
Binance supports a wide range of digital currencies including Bitcoin, Ethereum and its own Binance Coin (BNB). Binance charges very low fees at just .1 percent for trades. If you want to go far beyond the most popular coins, Binance is your best option.
Binance offers the option to trade coins into multiple currencies and supports digital currencies, including EOS, Skycoin, TRON, ICON, Ethereum Classic, Litecoin, Ripple, Stellar Lumens, Bitcoin Cash, plus a bunch of cryptocurrencies you have probably never heard of.
While this is platform offers a huge range of currencies at a low cost, there are some bugs reported with the Android mobile app and some users have reported delays withdrawing certain currencies. Binance is not insured, which may be a major concern to some, particularly after some irregular trades were detected and reversed in March 2020.
Good Choice for Beginners!
Free Trading Education, Free Demo Account!
Get a Sign-Up Bonus Now!
2nd in our ranking!