Social trading platform eToro has had a great start to the year, and as it gets ready to launch a cryptocurrency offering in the U.S., set to take place in the second half of 2018, and its eToro wallet, the platform has revealed that it will be launching its own exchange later this year.
Yoni Assia, co-founder and CEO of eToro, was speaking to CoinJournal during the Consensus conference in New York, when he made the announcement.
“We are building the exchange in order to support hundreds of tokens,” he said.
While he didn’t clarify which tokens the exchange would initially support, Assia said that it would start out as a crypto-to-crypto exchange, which would eventually offer fiat as well. The launch of its own dedicated digital currency wallet will also further boost the platform’s standing among the crypto world, giving users the tools they need to take part in the industry.
“This will enable people to buy cryptos directly, and send and receive Bitcoin, Ethereum, Litecoin, Bitcoin Cash, etc.,” Assia said. “When a customer today buys Bitcoin at eToro they already buy the Bitcoin, but until today we didn’t enable our customers to actually send and receive Bitcoin.”
News of this comes at a time when eToro raised $100 million during a venture round in March, led by China Minsheng Financial. In recent months, the trading platform has also been expanding on its cryptocurrency offerings, including Stellar, NEO, and EOS. Following the addition of these altcoins, eToro now boasts support for 10 cryptocurrencies, the others being Bitcoin, Ethereum, BCH, XRP, Litecoin, Ethereum Classic, and Dash.
With new coins expected to be added to the platform in the future, Assia explained that the company follows a strict five-step process on each cryptocurrency that is added to eToro. This includes its market cap, adding only those that have, at least, a $1 billion market cap; daily volumes of more than $50 million; quality analysis; security; and research on the team behind the mechanics of the coin.
“We study every crypto before it’s added on eToro to enable us to have that level of research that Mati [eToro’s senior market analyst] does on every one of the cryptos,” Assia added. “It doesn’t mean every crypto on eToro means you should buy because it depends on the price, but it means that we’ve done sufficient analysis to say that if the price is right you should buy it.”
With its upcoming foray into the U.S. market, this marks a significant milestone for eToro. Already the company has over ten million users in more than 140 countries including the U.K., Germany, Switzerland, Spain, and Australia. Now with U.S. users set to boost those figures they will have the opportunity to invest in the 10 cryptocurrencies that the trading platform currently supports. They will also have the chance to access social trading tools including a community feed, allowing them to engage in conversations regarding digital currencies, and will be able to follow the investment strategies of other U.S. users. For the time being, though, prospective users can register into a waiting list at eToro.
Notably, considering the heightened issue of regulation relating to cryptocurrencies and the U.S.’s keenness to monitor the market, launching a cryptocurrency offering in the U.S. has been met with little resistance for eToro. As a regulated company by the U.K.’s Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC), plus its 10-year experience, the trading platform understands how to work with regulators, and is understanding of the risks and challenges of cryptocurrencies.
“We already have a significant business in cryptocurrency and we have rigid processes around custody of customer assets,” said Assia.
“We have been able to share that with the different regulators and explain to them what we do. We expect this to be a constant discussion around the right path of regulations for cryptos.”
Assia adds that while building the right regulatory framework for the cryptocurrency industry in the U.S. may not be achieved this year, he believes that more certainty will come from jurisdictions like Gibraltar due to the fact that more businesses in this sector are going to launch in these countries.
Talking about the cryptos he is most interested in, Assia said that he is a big believer in Bitcoin and Ethereum as the core assets. In his opinion, Bitcoin is digital money, whereas, Ethereum has created a new type of market with initial coin offerings (ICOs), which he thinks are here to stay. Regulatory challenges do, however, exist with ICOs as do the scams attached to some of them. Yet, the CEO said that many of the 1,000 projects which have conducted ICOs and are developing Dapps are very interesting. As a result, he thinks that we are seeing a level of ‘maturity in the Ethereum ecosystem.’ He also sees plenty of potential with NEO, Ripple, and Stellar.
Of course, with Consensus failing to produce the rally in prices that many were hoping for, Assia remains bullish on where market conditions are heading. At the time of publishing, Bitcoin is trading below $8,000 at $7,895, according to CoinMarketCap. Ethereum is valued at $623 and Litecoin is just under $125.
“Is there a bubble in prices?, asked Assia. “Maybe yes, maybe no, but I think longer term I’m quite certain that we are going to see prices higher than this.”