EToro crypto revenue dips 30%, acquires TradeZero for US expansion
eToro's Q2 crypto revenue fell 30% to $1.34 billion, with trading volumes down 73% YoY. It also announced the acquisition of TradeZero, a US online brokerage with $80 million revenue, as part of its expansion. The deal closes H1 2026 and is expected to be EPS accretive.
Quick Take
Crypto revenue drops 30% YoY, trades fall 73% in July.
eToro acquires TradeZero to expand equities and US presence.
Deal expected to close H1 2026, accretive to EPS.
ETOR shares drop over 5% pre-market.
Market Impact Analysis
BearishDeclining crypto trading volumes and revenue at a major retail platform signal reduced retail engagement, potentially bearish for crypto market sentiment.
Speculation Analysis
Key Takeaways
- eToro's crypto revenue sank 30% year-over-year to $1.34 billion, while July trade counts collapsed 73% to 1.4 million.
- The platform will acquire TradeZero, a US equities broker with $80 million in trailing revenue, to diversify beyond crypto.
- ETOR shares fell over 5% pre-market as investors digested the earnings miss and declining trading activity.
- The TradeZero deal is expected to close in H1 2026 and immediately boost adjusted earnings per share.
What Happened
eToro's second-quarter earnings revealed a sharp contraction in crypto trading income, pulling total revenue down to $1.59 billion from $2 billion a year earlier. The bulk of that decline came from digital assets, where revenue fell 30% to $1.34 billion. Net income from crypto was a mere $19.7 million, underscoring thin margins after accounting for $1.35 billion in related costs. The company's bottom line was salvaged by equities and commodities trading, which generated $141 million in net income, pushing total net income to $53.4 million. Alongside the financials, eToro announced the acquisition of TradeZero, a US online brokerage, to accelerate its multi-asset push and US expansion. The market responded swiftly, sending ETOR shares down over 5% in pre-market trading.
The Numbers
Crypto activity on eToro dried up dramatically. The number of cryptocurrency trades executed in July plummeted 73% year-over-year to just 1.4 million, with invested amounts also halving. This mirrors broader market fatigue after the meme coin and DeFi hype cycles. Meanwhile, TradeZero brings solid fundamentals: $80 million in revenue over the past twelve months and 81% gross margins. eToro expects the acquisition, slated to close in the first half of 2026, to be immediately accretive to adjusted earnings per share. The $1.34 billion in crypto revenue, though down 30%, still dwarfs the $80 million tradezero brings, highlighting the platform's current dependency on digital assets.
Why It Happened
The crypto revenue slump reflects a classic cooling of retail enthusiasm. The speculative frenzy that drove record volumes in 2025 has given way to risk-off sentiment across digital asset markets. eToro's user base, heavily tilted toward retail traders, pulled back as meme coin mania faded and volatility subsided. The TradeZero acquisition and April's Zengo wallet deal signal a deliberate pivot: eToro is building a diversified revenue base less exposed to crypto cycles. By expanding into equities and self-custody, the platform aims to capture traders even when crypto markets stagnate.
Broader Impact
eToro's struggles may foreshadow headwinds for other retail-focused crypto platforms. As major on-ramps see trading volumes evaporate, the entire ecosystem faces reduced liquidity and sentiment pressure. The TradeZero acquisition sets a precedent: platforms may increasingly merge or diversify to survive bearish phases. For the broader market, ebbing retail engagement could delay any sustained recovery, unless institutional capital steps in to fill the void.
What to Watch Next
- Track eToro's user growth and asset diversification metrics as TradeZero integration begins.
- Watch crypto trading volumes on peer platforms like Coinbase for signs of a broader retail retreat.
- The Zengo wallet acquisition hints at a deeper push into self-custody and DeFi—monitor product launches.
This article is for informational purposes only and does not constitute financial advice.
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