Crypto Platform eToro Earned $600m Revenue in 2020

Social trading platform eToro has seen its fortune rise ever since it made a move into the cryptocurrency space. The Israel-based exchange platform earned about $600 million in gross revenues at the close of business in 2020.

Lucrative Crypto Market

eToro has revealed that it’s trading volumes for 2020 were 400 percent higher than 2019 figures, per a Finance Magnates report. The total trading volume for 2020 was over $1 trillion. 

The trading platform said it earned a whopping $600 million in gross revenue thanks to the influx of new users, which stands around 17 million in total.

“The last few years have seen a rapid growth in eToro’s headcount reflecting both our global expansion and the growth of our product offering and client base,” company CEO Yoni Assia explained in the report.

eToro’s growth in the crypto space is expected considering the suite of products it offers. The online trading platform initially concentrated on the traditional financial markets when it launched in 2007. It provided traders with a social trading platform to execute trades in forex, commodities, and equity markets. 

Riding on the immense success it garnered in those markets, the platform floated a crypto exchange (eToroX). What sets eToro apart from the competition and in the cryptocurrency sector is its copy-trading technique.

Bitcoin Liquidity Issue

Copy trading is a strategy that allows investors to copy the trades of other established and experienced traders. But as cryptocurrency prices rose, new customers found inroads into the platform. The platform’s marketing manager Brad Michelson even revealed that 380,000 new users had opened accounts on the platform.

The increased demand for bitcoin coupled with the liquidity crunch pushed the exchange to send a notice to its users. eToro informed its users to be wary of possible limitations with crypto buy orders due to the insane demand from customers.

“The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support BUY orders over the weekend.”

The exchange also temporarily increased the minimum deposit for new users to $1,000.

.@eToro has seen an unprecedented demand for our services from new users. To manage demand & ensure our existing community of 17M registered users can continue to access our services uninterrupted, we have temporarily increased the minimum deposit amount for new users to $1,000.

— eToroService (@eToroService) January 8, 2021

The trading platform also restricted some of its EU customers from accessing margin trading on its platform. The platform was slammed by customers on Twitter who claimed the margin trades were called at the peak of Bitcoin’s record rally. The exchange is also rumored to be prepping up for an initial public offering. This follows the path of other cryptocurrency exchanges, like Coinbase and Gemini, looking to approach the public markets to raise funds.