eToro Acquires TradeZero as Crypto Trading Volume Collapses
The retail trading platform eToro has announced an acquisition of US brokerage TradeZero, even as its crypto revenue dropped 30% in Q2 and trading activity tumbled year-over-year.
eToro Bolsters Multi-Asset Strategy with TradeZero Deal
eToro, the global retail trading platform, announced Tuesday that it plans to acquire TradeZero, a US-based online brokerage, as part of its ongoing expansion into the American market. The transaction represents the latest in a series of moves by eToro to diversify across multiple asset classes. The company previously announced the acquisition of Zengo, a self-custodial wallet provider, in April.
The acquisition comes as eToro faces headwinds in its crypto division. According to eToro’s second-quarter financial report, the platform’s total revenue reached $1.59 billion, down from $2 billion in the comparable quarter of 2025. Crypto-related revenue proved particularly vulnerable, declining to $1.34 billion from $1.9 billion year-over-year—a 30% contraction. However, the company managed to generate $19.7 million in net income from crypto assets, with total net income reaching $53.4 million. Equities and commodities trading contributed substantially, generating $141 million in net income for the quarter.
Trading Activity Plummets on Platform
The underlying market dynamics tell a stark story. Cryptocurrency trades on eToro fell to just 1.4 million during July, marking a 73% decline compared to the same month the prior year. The invested amount also contracted by 50%, signaling both a reduction in trading frequency and deal size. Despite the contraction, eToro reported $1.35 billion in crypto-related cost of revenue during Q2, indicating the infrastructure supporting crypto trading remains substantial.
Meron Shani, chief financial officer at eToro, offered insight into the platform’s diversification efforts. According to eToro’s reporting, more than 60% of users who traded commodities between Q4 2025 and Q1 2026 subsequently traded equities in Q2 2026. Nearly nine in ten of those users also engaged in crypto trading during the period, suggesting that while absolute crypto volumes have declined, the platform’s ability to serve users across asset classes remains a competitive advantage.
TradeZero Brings Strong Economics
TradeZero generated approximately $80 million in revenue during the twelve-month period ended June 30, 2026, with gross margins of 81%, demonstrating the profitability potential of the acquisition. eToro has projected that the transaction will be accretive to adjusted earnings per share in the first year following close, with deal completion anticipated in the first half of 2026.
Investor sentiment toward the announcement has been mixed. eToro’s Nasdaq-listed shares declined more than 5% in pre-market trading Tuesday, continuing losses from the prior trading day. The stock decline suggests market participants may harbor skepticism about the timing or execution of the acquisition amid the broader crypto trading slump.
The significance for the crypto industry lies in how major platforms respond to market contraction: through consolidation and cross-asset diversification rather than narrow focus on a single asset class.
Source: eToro, via Cointelegraph. Not financial advice.