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eToro vs Binance: Pros, Cons & Features
Whether you’re getting involved with the stock market for the first time or you’re a seasoned pro when it comes to cryptocurrency trading, the investment platform that you’re using naturally plays a pretty key role in how successful a trader you’re going to be.
Though at their core, trading platforms generally work fairly similarly to one another, there are definitely key factors that separate a good service from a bad one — from the fees that they offer to the liquidity of the platform.
eToro and Binance are some of the most popular platforms out there for you to trade on right now, and given how much time and funds you could potentially be investing into the service, it’s worth educating yourself regarding which is better suited to your individual trading style.
So, throughout this article, we’ll be weighing eToro and Binance up against one another so you’re able to make a better decision. Let’s kick things off with eToro.
Table of Contents:
eToro: Your Social Trading Hub ➡️
Firstly, it’s worth mentioning from the start that perhaps the most significant difference between eToro and Binance is that while the former is classed as a multi asset investment platform, Binance operates strictly as a cryptocurrency exchange.
In essence, this means that while you can trade a vast list of financial instruments with eToro — stocks, commodities, ETFs, CFDs, even cryptocurrency — Binance works slightly differently as their platform focuses entirely on digital assets instead.
While we could simply conclude from this that eToro is the superior platform, given how much extra functionality it has, it’s only fair that your judgement is made if you’re only interested in trading cryptocurrencies.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Crypto assets are highly volatile and unregulated. No consumer protection. Tax on profits may apply
Imagine if you were only able to trade cryptocurrencies on eToro rather than the other financial assets, for instance — how would the platform, with its impressive list of features and the user interface, compare against the Binance exchange?
We’ll be covering this multi asset aspect of eToro’s appeal throughout the article regardless (as it’s obviously a major pull factor when making a decision between the two), but just bear this in mind while reading.
With that said, let’s get into the pros and cons of using eToro:
Pros of eToro
We’ve talked fairly positively thus far about eToro, but for the sake of impartiality, it’s only fair that we walk through both the pros and cons of this trading platform:
Social Trading and Copy Trading ✔️
Perhaps one of the most prominent reasons for eToro’s general appeal has to be the approach it’s taken towards its social trading and copy trading sectors of the platform, which is, importantly, not something that’s available with Binance.
Trading is often a pretty solitary practice, but the social trading aspect of eToro’s service plays a massive part in transforming investing into a more collaborative and community-driven experience.
That’s not to say it’s just a low quality social network tucked away in the corner of the app; it’s actually an incredibly useful place for novice investors to connect with and even replicate the strategies of some of the most seasoned traders currently on the platform.
Naturally, this is great for anyone seeking a passive income stream who’s a bit less confident in making independent trading decisions at the moment, but don’t underestimate how much you can learn from observing trading patterns from professionals.
Smart Portfolios ✔️
Smart portfolios are another major part of eToro’s appeal, and this is basically a trading account that you can open with them that’s powered by an algorithm, meaning the whole investment process gets automated based on whatever risk tolerance and financial goals you set.
Obviously, you’d ideally like to manage your investment portfolio yourself, but for the beginners out there who may need some form of training wheels, this automated approach simplifies the decision-making process while still letting you reap the benefits of a diversified portfolio.
Secure Platform ✔️
eToro Aus Capital is legally required to follow all of the regulations set by the Australian Securities and Investments Commission (ASIC), so you can be confident knowing you’ve got a good level of security and consumer protection when using the platform.
Cons of eToro
As mentioned, eToro isn’t without its set of flaws, either, so let’s dive into the reasons why you may think twice about signing up for this platform:
Transaction Fees ✖️
Generally speaking, the fees on eToro aren’t anything to write home about, and there’s no major way of reducing them like you can with Binance, as we’ll come on later.
Having said that, when you consider some of the ‘value-added’ services that come extra with eToro, like the social and copy trading features, it can provide a little bit of context in terms of where these fees come from and if they’re worth it.
Reliance on Social Trading ✖️
Though the social/copy trading features we’ve talked about already can naturally sound pretty exciting — especially if you’re a newcomer to trading and would benefit from some investment advice — there is a slight tendency for people to become overly reliant on them.
That’s not to say that you can’t still make money from copy trading and that you shouldn’t explore it at least once; it’s just not the best way to actually grow as a trader.
Generally speaking, investing comes with masses of hardship, and in the same way, you’re not getting the full trading experience when trading with a demo account; you’re not getting one by simply copying and pasting someone else’s trade for your own — essentially utilising their technical analysis and broader understanding for your own without having any real idea why it was a good decision.
This is often the same problem you’ll run into if you ever thought about joining a trading signals group on a messaging platform like Discord or Telegram — the opportunity to make money is there, but you’ll never become a better trader without learning on your own through trial and error.
Binance: The Global Crypto Powerhouse ➡️
Moving forward, let’s focus on Binance, covering what features make the platform enticing and which ones are slightly less appealing in comparison to other crypto exchanges.
Again, it’s worth reiterating that Binance isn’t a multi asset investment platform like eToro, so try to compare only eToro’s cryptocurrency trading aspects when thinking about Binance.
Pros of Binance
Let’s get started by covering the advantages first:
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.
Extensive Crypto Markets ✔️
As far as cryptocurrency platforms go, there are a fairly limited number of platforms that can compare to both the notoriety and success of Binance — one of the most popular services in the world for both spot and leveraged crypto trading.
Not only can you play things safe and stick to well-established tokens like Bitcoin, but you’ve also got the option of trading niche altcoins — some of which can see gains of over 100% in a mere day — just remember that altcoins like this can be equally as volatile in the opposite direction and cause you to lose money.
Obviously, these aren’t the kinds of gains you’d ever see when investing in the stock market or even with commodities, so the potential to make a serious amount of crypto rewards on Binance is certainly there.
Going back to the range of options available to you when investing with Binance, this can naturally be a massive help when it comes to diversifying your crypto wallet. eToro has the multi asset aspect going for it in terms of diversification, so this wide selection of crypto assets on Binance is definitely a pull factor in that regard, given that it has more crypto pairs than eToro.
Binance Coin (BNB) ✔️
Perhaps one of the biggest features that separates Binance from eToro is its native cryptocurrency, Binance Coin (BNB) — something that’s lacking with the latter platform.
Not only does BNB offer an investment opportunity, as the value of the coin is generally directly correlated with the success and growth of Binance as a platform (as well as the wider crypto market, of course), but you’re also able to leverage BNB as a means of reducing transaction fees on the platform.
This is a massive way of keeping costs down if you’re going to be trading a lot on Binance, as you’re actually able to reduce trading fees up to 25% from simply holding this coin. Again, there’s no such asset like this with eToro, so you’ll have to pay the full transaction fee when trading over there.
Leveraged Positions ✔️
Though we’ve talked a little bit about spot trading on Binance, the more seasoned traders out there are probably wondering if you can trade futures contracts with leveraged positions on the platform — and, fortunately, the answer is yes.
In essence, this is a feature that allows you to gain a lot more exposure to the market, meaning your relatively small position size becomes much larger, which can potentially increase your profits (albeit with an equally as high risk of losing money).
Just make sure that any of the novices reading this without experience with leveraged trading take caution here and have a solid understanding of all of the associated risks — of which there are plenty.
Cons of Binance
Finally, let’s walk through some of the reasons why you might want to choose eToro over Binance:
Complex Interface ✖️
Generally speaking, the Binance markets aren’t exactly the most intuitive place to get started in your crypto journey — especially with how much eToro holds your hand with features like Copy Trading until you’re ready to trade independently.
It’s nice to have a myriad of features, trading options, and general market data, but this can definitely be a little bit jarring in the beginning.
What’s more, there’s a good chance you’ll miss some of the educational and collaborative aspects that come with social trading, so it’s best to only choose Binance if you prefer a more independent approach to decision-making.
Final Thoughts 💡️
To wrap things up, it’s hard to give a clear cut answer as to which trading platform is a stronger choice for you, as the decision is ultimately made depending on what kind of trading style you like to adopt while you invest.
If you’re primarily a cryptocurrency trader who isn’t interested in their user interface being flooded with ETFs and commodity trading pairs, you’d be better off with a tailor made platform in Binance.
However, if you take a more holistic approach to trading and have a more diverse portfolio, you might prefer eToro. Of course, it’s always nice to know that you can dabble in the cryptocurrency market if you want to with eToro, but don’t expect anywhere near the same dedication and capabilities as Binance if you are going to mainly trade cryptocurrencies with them.
Ultimately, both platforms, while potentially highly lucrative investment vehicles, come with a massive amount of risk to retail traders who don’t have the financial backing of a major hedge fund or the trading nous of a seasoned day trader.
So, try not to get too ahead of yourself while trading, and focus more on understanding technical analysis and risk management before investing substantial amounts of your hard earned money.
How Can I Contact Customer Support on eToro and Binance?
Though a direct phone number would be more ideal, eToro and Binance both offer customer support through a ticketing system where you’re able to submit inquiries — response times might vary, though, so check the platforms for the most up-to-date information. Both of them have pretty extensive knowledge bases for common queries, too, so be sure to check here first.
What Is Cryptocurrency Trading, and How Does It Work?
Cryptocurrency trading is centred around digital assets like Bitcoin and Ethereum, and you’re able to trade them on various online platforms like Binance and eToro. Like most financial assets, the aim is to buy low and sell high, and this is a process that relies on basic market demand and supply dynamics. Crucially, you’re able to trade crypto 24/7 as well because of their decentralised nature.
How Much Money Do I Need to Start Trading Cryptocurrencies?
In general, the amount needed to trade Bitcoin varies. Fortunately, most platforms allow you to start with a pretty small investment, but the ideal amount obviously depends on how much you’re willing to risk tolerance and what your trading goals are. It’s imperative that you’re only investing what you can afford to lose — gradually increase exposure as you gain experience instead of going all in from the start.
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