eToro vs Binance

Written by Nick Zelver

Fact checked by Mike Druttman

Updated Mar, 2024

Introduction

In the dynamic world of social trading platforms, eToro and Binance stand out as two of the most prominent exchanges globally, both carving a distinguished presence in mobile trading. These platforms offer groundbreaking features that have revolutionized how traders interact with financial markets, simplifying the process of moving assets with unprecedented ease.

eToro, established in 2007, is not only a social trading app but also a comprehensive brokerage. It empowers traders to engage in a variety of financial transactions, from cryptocurrency trading to dealing with various assets like CFDs. What sets eToro apart is its CopyTrading feature, enabling users to emulate the strategies of seasoned, successful investors. The platform offers an extensive array of trading instruments, including currencies, stocks, currency pairs, forex, commodities, indices, and cryptocurrencies.

On the other hand, Binance, which began its journey in China in 2017 before relocating to Malta, is exclusively a cryptocurrency exchange. It boasts the title of the world's largest crypto exchange by daily trading volume, offering access to over 500 cryptocurrencies.

This comparison delves deep into the unique attributes and potential drawbacks of each trading app, guiding you to determine which platform aligns best with your investment and trading goals.

Comparison Overview

In this section, we present a detailed comparison between eToro and Binance, two leading trading platforms, to offer you a comprehensive view of their features and functionalities:

CFD Trading Features

eToro distinguishes itself in the trading platform arena, particularly with its Contract for Difference (CFD) trading feature, a capability not commonly found in many platforms, including Binance. This functionality extends beyond the conventional buying and selling of cryptocurrencies, making it one of eToro's key offerings.

A Contract for Difference (CFD) is an agreement between a buyer and a seller stipulating that the buyer will pay the seller the difference between the current value of an asset and its value at the contract's inception. This type of trading enables investors to potentially profit from the price movements of various financial assets without the necessity of owning the actual assets. Such versatility in trading options is what makes eToro's CFD trading an attractive choice for many traders.

Account Types and Membership Tiers

eToro offers a dynamic and tiered account structure to accommodate the diverse investment levels of its users, known as the eToro Club. This club categorizes memberships into different levels, each loaded with a unique set of features, perks, privileges, and offerings, tailored according to the user’s equity holdings. The various membership categories within the eToro Club include:

1. Silver
2. Gold
3. Platinum
4. Platinum+
5. Diamond

Each tier in the eToro Club enhances the trading experience with progressively richer benefits and services.

Conversely, Binance maintains a more streamlined approach, offering a single regular account type. However, this account provides access to an extensive array of over 500 cryptocurrencies, allowing users to trade and invest in a wide range of digital assets. This simplicity in account structure, coupled with the vast cryptocurrency options, makes Binance a compelling choice for those seeking straightforward crypto trading.

Demo Account Features

eToro enhances the user experience by offering a demo account, complete with a virtual fund of $100,000. This feature is particularly beneficial for users looking to sharpen their trading skills through simulated investments without financial risk. The demo account serves as an excellent tool for traders to familiarize themselves with the trading environment, offering a realistic preview of real-world trading scenarios.

On the other hand, Binance does not provide a demo account for practicing cryptocurrency trading. As a result, users are advised to have a solid understanding of cryptocurrency trading concepts and mechanics before engaging with the Binance platform.

For those interested in exploring eToro's demo account, it is accessible through the link provided below. Keep in mind, that to use eToro’s virtual portfolio, you must first create an account. Rest assured, opening an account does not obligate you to make an immediate deposit. This allows you to explore the platform at your own pace. When you're ready to transition to live trading, you can easily fund your account and use this capital to commence your investing journey.

Asset Options and Diversity

In the realm of cryptocurrency trading, Binance stands out with its extensive offering of over 500 cryptocurrencies, catering well to the needs of dedicated crypto traders. This vast selection continues to expand, presenting a wealth of options for those focused solely on cryptocurrency investments.

Conversely, eToro offers a more limited selection of cryptocurrencies, with over 80 options available for trading. However, eToro compensates for this by providing a diverse array of other financial instruments. These include forex, stocks, and currency pairs, totaling over 3000 different instruments. This variety makes eToro particularly appealing to traders who are looking to diversify their portfolio beyond just cryptocurrencies.

For traders who aim to invest in major cryptocurrencies like Bitcoin, Ripple, Ether, and Dogecoin, but also want the flexibility to branch out into other financial markets, eToro could be the ideal platform. On the other hand, if your focus is exclusively on the cryptocurrency market, Binance's ever-growing list of crypto coins offers a more specialized and expansive crypto trading experience.

Fee Structures

Binance offers a competitive trading fee structure, charging a standard rate of 0.01% per trade. This fee can be further reduced by 25% for those who choose to pay using Binance's own cryptocurrency, the Binance Coin (BNB). Additionally, Binance imposes a fee for credit card purchases, set at $10 per transaction. It is important to note that while the fee for each credit card purchase is 3.5%, it never falls below the minimum charge of $10.

eToro, on the other hand, employs a different fee model, which varies depending on the asset being traded. The platform primarily earns from the spread, which is the difference between the buying and asking price. For popular trading instruments, especially cryptocurrencies like Bitcoin, traders can expect a fee ranging from 0.75% to 2%, which can rise to as high as 3.5% in certain cases.

The choice between eToro and Binance largely depends on your trading preferences. If your focus is on a wide range of diverse investments, eToro's fee structure might be more suitable. However, for those primarily interested in cryptocurrency trading, Binance's low transaction fees on crypto trades could be more advantageous. 

Distinctive Features and User-Friendliness

Features

eToro's distinctive CopyTrading feature sets it apart from other trading platforms. This innovative tool allows users to replicate the trading actions of successful eToro traders, offering a unique opportunity for learning and strategy development. This feature especially appeals to new or less experienced traders seeking guidance in the complex world of trading.

Binance has expanded its offerings to include margin trading, aligning itself with eToro and a select few platforms that provide this feature. While Binance and eToro share a similar range of features, eToro's broader portfolio of financial instruments, combined with its unique CopyTrading feature, gives it a significant advantage over Binance in terms of overall functionality.

User-Friendliness

eToro trading is renowned for its user-friendly interface, characterized by well-organized option setups and a straightforward 1-click trading process. This intuitive design ensures that users can effortlessly navigate through the platform, exploring its features and capabilities with ease. The fixed spreads process further simplifies trading activities, making eToro an accessible platform for both novice and experienced traders.

In contrast, while Binance offers robust functionalities, its interface may present a steeper learning curve, especially for those new to trading. Users often find that eToro's layout and design offer a smoother and more intuitive user experience compared to the more complex interface of Binance.

Regulatory Compliance

It is essential to consider the regulatory status of any trading platform or broker. Engaging with a licensed entity not only affirms its commitment to ethical business practices but also offers peace of mind, knowing that the platform is under the scrutiny of financial regulatory authorities. This oversight ensures a higher level of security and transparency for clients.

eToro’s Regulatory Licenses

eToro stands out as a multi-regulated brand, holding licenses from several respected regulatory bodies, which underscores its reliability and commitment to adhering to strict financial standards. These include:

• Cyprus Securities & Exchange Commission (CySEC): eToro (Europe) Ltd. is licensed under company registration number HE20058.
• Financial Conduct Authority (FCA): eToro (UK) Ltd. is authorized and regulated, with company registration number 7973792.
• Australian Securities and Investments Commission (ASIC): eToro AUS Capital Pty Ltd. holds an Australian Financial Services Licence (AFSL) 491139, issued by this regulator.

Binance’s Regulatory Status

In contrast, Binance, despite being one of the world’s largest cryptocurrency trading platforms, does not hold licenses from major financial authorities such as the FCA, SFC, or MFSA. Notably, Binance has not registered with the FCA and, as a result, is not authorized to operate an exchange in the UK. This lack of regulatory licensing is a crucial consideration for users who prioritize trading with a regulated entity, as it may imply different standards of operational compliance and customer protection compared to a regulated platform like eToro.

Conclusion

Based on my extensive experience with both platforms, I can confidently say that eToro often has the upper hand, particularly for traders seeking a versatile and comprehensive trading experience. Its user-friendly interface, characterized by 1-click trading and fixed spreads, combined with the innovative CopyTrading feature and the Demo Account, provides a well-rounded trading environment. Additionally, eToro's accommodation of Islamic trading practices is a testament to its inclusive approach. Binance, while robust in its offerings, especially for crypto enthusiasts, still has ground to cover to match the breadth and depth of eToro's features.

For those exclusively interested in cryptocurrency trading, Binance stands out as a formidable choice, thanks to its extensive range of crypto offerings. However, in my experience and observation, many traders eventually seek to diversify their portfolios. This is where eToro's array of additional financial instruments and robust features become particularly attractive. The platform’s ability to cater to a broader spectrum of trading needs, along with its regulatory compliance and diverse account options, makes eToro an appealing and reliable choice for both novice and experienced traders looking for growth and diversification in their investment journey.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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.

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.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply. 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. Take 2 mins to learn more.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.