In this article we will discuss Bitcoin social trading vs Copy trading. We will review the world’s giant of social trading services that is eToro.
eToro invested early on social trading and introduced services early on such as copying successful trades and copying certain combinations of eToro’s own portfolios.
In this article, we will examine what Bitcoin social trading features eToro offers and what are the advantages and disadvantages of their products such as social trading, copying and copyportfolios. We will answer these questions
- What is Bitcoin social trading?
- What features eToro offers
- What are the benefits of Bitcoin social trading?
- What are the disadvantages of Bitcoin social trading?
Social Trading Definition
Social trading means that you can get information from other traders at a trading community. Via the trading community, it can be possible to share knowledge, follow other users and see their results, and other interactions to learn from each other. In this article, we will focus on Etoro and its social trading platform which we think is the best on the market.
What is Bitcoin Social Trading?
Bitcoin social trading is same as social trading but you have access to trade Bitcoin as well. Usually, other altcoins are also presented. eToro, for example, support all major cryptocurrencies and also several fiat currency trading pairs. Also, read a full article about crypto social trading on eToro.
Bitcoin Social Trading VS Copy Trading?
So, eToro does offer bot social trading and copy trading. However, is there any difference?
As described above, social trading means that a community trades individually but can get information from each others by a community. Also, it is possible to see the portfolio from other traders. However, it doesn’t include, by the definition, a copy feature.
But, eToro does supply a copy function where you will be able to copy other traders or predetermined portfolios created by eToro themselves. For example, there are several eToro Crypto Portfolios.
Social Trading eToro Review
eToro is the number one crypto social trading platform. By creating an account at eToro, you get access to several different services eToro offers such as copying, copyportfolios and popular investor programs.
With the Copy Trader you can easily select a trader to copy. It means that your trading account automatically perform all the same trades as the one that you copy.
You can sort traders according to different parameters such as historic results, risk score, number of followers and much more. You can choose to copy any of these investors listed.
Below you can see a printed screen of copy people. In the header menu you can select region, markets, historic results and time period.
And in the next sections you see different top performing traders in different categories.
First category is editor’s choice, followed by top investors, and trending. These are followed by more categories out of the picture which are most copied, lowest risk score, medium risk score
CopyFunds, CopyPortfolios CopyPortfolios are investment vehicles that bundle together a collection of financial assets.
The assets are picked and re-picked, given a pre-determined strategy. eToro offers a function they call Copy Funds, which means that you do not copy an individual trader without a basket of traders or a basket of cryptographic currencies or other assets (Shares, currencies, Index etc)
These should not be confused with ETFs or hedge funds.
Top trader copyfunds
This is a basket of several trades instead of a trader. All portfolios have a clear strategy and many are management by eToro, ie. they invest in a number of different traders with a pre-programmed strategy.
This is market access, which is a basket of cryptographic currencies or other asset classes such as shares and currencies. Examples of baskets are
- CryptoPortfolio: This is a diversified crypto portfolio focusing on cryptocurrencies with a market cap over $ 1 billion and an average daily trading volume or over $ 20 million throughout the month. The weight of each component is decided proportionally according to its market cap, with a minimum of 5%. This is a portfolio management product at eToro.
- Crypto-Currency: The portfolio´s allocation is based on the market cap of Bitcoin and Ethereum. The portfolio is rebalanced at the beginning of each month and managed by eToro´s investment committee.
- Examples of other CopyPortfolios are: MobilePayments, Cybersecurity, Driverless, CannabisCare
Popular investor program
When they are copied by other people, Popular Investors earn fixed payments and up to 2% of their annual assets under management (AUM). These payments are in addition to any profits made from their own trading.
What are the benefits of eToro Bitcoin Social Trading?
- No trading skills required
- Takes a minute to set up a copy account
- The crowd wisdom is always better than the individual knowledge
- Easy to follow several different traders
- There is a lot of information to learn from each other
What are the disadvantages of eToro Bitcoin social trading?
- Traders can use several accounts and you only see the good account and think that it is a trader to learn from
- High fees to copy trader.
- You can control your own trading when you choose to copy