If you’re new to trading or buying cryptocurrencies, or you simply haven’t cared about them at all, you might be wondering why you need a digital wallet, what they are, what they do, and if eToro’s Wallet is any good. There is so much information, and so many stories, about cryptocurrency and crypto scams, that it is understandable if you don’t quite know who you can trust or where you can actually safely invest in cryptocurrency.
On the other hand, if you are comparing digital wallet options, it can be overwhelming to compare the different options and their benefits and drawbacks. Lucky for you, we looked into eToro’s crypto wallet for you. Here is everything you need to know about eToro’s wallet option, and how it works.
What Are Cryptocurrency Wallets?
Despite what its name implies, a cryptocurrency wallet, also known as a crypto wallet, is not a service or a device that actually stores your cryptocurrency. Cryptocurrencies don’t actually “go” anywhere and you can’t move them. All cryptocurrencies are recorded on the blockchain network, and every crypto exchange is just an updating of the data for each currency in the network. Instead, a crypto wallet is just a way to store the public and private keys used for cryptocurrency transactions.
Every wallet has two keys: a public key that is open to anyone and allows users to receive cryptocurrency and a private key that proves you own certain cryptocurrencies and must be kept secret and secure.
A wallet can be a software, an application, or even a piece of paper. All it needs to do is keep track of which currencies are currently attached to your private key, and what your keys are. Some digital wallets offer additional features besides storing your keys and keeping track of your balances, but their base function remains essentially the same.
There is no need to have your wallet connected to the internet at all, and you don’t need to use a third party like eToro or other popular wallet companies at all. Crypto wallets are valuable targets for hackers and scammers, but using a third-party app is much easier than doing it all yourself.
There is much more to learn about crypto wallets and the different types, features, and benefits of all of the options available to you. Your local cryptocurrency fanatic would be more than happy to educate you.
If you are just dabbling in cryptocurrency, however, it is enough to understand some of the basic features of the wallet you want to use.
How Does eToro’s Wallet Work?
Like most crypto wallets, eToro’s Money crypto Wallet allows users to store any crypto they purchased on the eToro platform and hold it or transfer it to another wallet. Besides some additional features and the fee structure, eToro’s crypto wallet functions almost identically to all other crypto wallets available.
eToro’s crypto wallet is actually part of its larger eToro Money product offering. eToro Money is a separate app from the eToro trading app and functions as an independent money management platform. It allows eToro users to more quickly and easily depot funds into their trading account instead of waiting for bank transfers. Users can deposit funds from their personal bank or from their eToro account without any deposit or withdrawal fees (other fees like debit card management still apply), enjoy instant deposits and withdrawals, and send or receive money to and from friends using the app.
Users cannot initiate stock or crypto trades from the Money app (and by extension, the crypto wallet) but it is a safe and easy way to protect what funds you have without needing to keep them in your investment account. Because the two apps are part of the same ecosystem, it is preferable over having apps or offerings from different companies. However, depending on your money and budget needs, your requirements will differ from other users, so we recommend looking into the details before you default to any crypto wallet or cash management app.
It is free to open and close your eToro Money crypto Wallet, and sending and receiving transactions from within the wallet is also free. There are still blockchain fees that might apply to these transactions, however. Additionally, there is a 1% fee to buy or sell any cryptocurrency, and then a 2% fee to transfer any cryptocurrency from your trading account to your wallet.
In order to use eToro’s crypto wallet, you need to live in one of the countries eToro is allowed to operate in, have a phone number, and have a verified eToro account.
How Does eToro’s Wallet Differ From Other Wallets?
Whether or not eToro’s crypto wallet is the right choice for you depends a lot on what you plan to do with your cryptocurrency and how active you are in trading and using the currency you own.
If you only want the cheapest option or are looking to be the next big crypto investor, then eToro is not for you. You can find cheaper wallets and platforms for trading or purchasing cryptocurrency, though their additional features might be lacking. On the other hand, eToro does not offer the widest range of cryptocurrency for purchase, so if you want to diversify your crypto assets, you will need to purchase them on other platforms and transfer them to your eToro wallet, which is a hassle.
eToro operates in many countries around the world, so the number of cryptocurrencies available to trade on their platform changes depending on where you live. If you have a particular digital currency you want to buy, make sure it is available on eToro where you live before you set up your account. As of the time of this article, there are fewer than 100 cryptocurrencies available for trade on eToro, and not all of them are available in the United States.
eToro is the perfect wallet for those who want a robust, simple, and relatively cheap option to store their cryptocurrency, for those who already have an eToro account and want to expand into crypto, or for those who are just dabbling in trading crypto. eToro offers helpful educational tools for those getting into trading crypto and it is nice to be able to buy and store your crypto on the same platform you can buy and sell other stocks. Once you set up an eToro account, however, you should plan to stay relatively active as there is an inactivity fee for accounts that aren’t used regularly.
Security-wise, eToro is on par with all other crypto wallets. Experienced crypto traders know that security is the most important feature of any crypto platform, and any that doesn’t meet the bare minimum is quickly identified and won’t succeed in the crypto market. Two-factor authentication and other security measures make eToro a safe option to store your cryptocurrency.
As the technology around cryptocurrency and trading in general advances ever more quickly, it will become more important to analyze the utility of a crypto wallet as part of a larger system or product offering than on its own. Platforms and wallets that are focused primarily on buying, selling, storing, and using cryptocurrency are always going to outperform those options offered by other institutions. If you are looking for something easy to integrate into your existing eToro experience, or just to get started, eToro (and the eToro wallet) is a great place to begin.
If you’re curious about any other part of eToro’s products and services, check out this page: a regularly updated list of all our eToro guides, news coverage, and lists of benefits.
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