With ten million users in more than 140 countries, social/educational and trading platform EToro is finally making a push into the United States. While inevitable, the move has been seen as many as premature and my some as misguided.
There is no denying Etoro’s success. By combining a social media platform with an investment platform and limitless in-house and community based educational options, users have been able to begin investing online without the usual large investment or pain associated with a steep learning curve. In fact, the EToro platform even has a feature that allows users to follow investors and make the same moves as them.
But it’s in emerging and cryptocurrencies where Etoro has shown it’s real strength. Riding the tide of the Bitcoin boom, the platform allowed investors to purchase in small amounts or percentages of Bitcoin. They were also one of the first platforms to allow the trading of Ethereum. So with all this in mind, why should there be any concern about EToro entering the United States? Because the market is saturated and a ‘one-stop-shop,’ isn’t necessarily a huge drawcard. Coinbase and Robinhood both have a substantial customer base and substantial brand recognition, along with a long term track record. Additionally, the bottom has fallen out of the crypto-currency market – something that was a massive precursor for Etoro’s initial – and ongoing – success.
Should the platform successfully infiltrate the U.S. it will be through leveraging it’s social assets and building a local community of investors – something that traditionally takes a long time. In the meantime, the business will have to gamble on their competitors not attempting to do the same thing, thereby taking away their strategic advantage.
Is the boom of the crypto-currencies over forever? It remains to be seen, but Etoro will need more than just a proven international track record to make it in the States.