In the second quarter of 2024, eToro's retail crypto trading volume fell 73% year-over-year, dropping to 1.4 million monthly trades with an average ticket size of $182—half of what it was a year ago. Yet the company's net income climbed 77% to $53 million, and its total net contribution rose 9% to $229 million. This dissonance is not a contradiction; it is a signal of a deeper structural shift in how digital assets fit into the multi-asset playbook.
Context: The Two Acquisitions That Reshape the Narrative
eToro is not a crypto-native platform trying to survive. It is a private company with $1.2 billion in cash reserves, a 2021 SPAC attempt behind it, and a clear strategy of buying infrastructure rather than building it. In April 2024, it acquired Zengo, a wallet provider using multi-party computation (MPC) technology, to deepen its self-custody and on-chain capabilities. In August, it announced the acquisition of TradeZero, a US broker-dealer with $80 million in trailing twelve-month revenue, targeting active stock traders who need short-selling and leverage tools. The TradeZero deal is expected to close in the first half of 2027, pending FINRA and SEC approval.
The crypto business itself is a study in thin margins. Gross crypto revenue hit $13.46 billion, but the cost of that revenue was $13.54 billion—a negative gross margin on spot trading. The entire crypto net contribution of $12.5 million came from $19.7 million in derivatives net trading income, plus blockchain rewards and staking. Spot crypto trading is a loss leader, sustained only by the more profitable derivatives and staking arms.
Core: The Macro-Melancholy of Retail Capital Rotation
From my years managing institutional digital asset allocations, I have modeled the correlation between traditional equity flows and crypto liquidity. During high-interest-rate periods, the correlation hit 0.85. eToro's data confirms what I observed: retail capital is not just rotating out of crypto—it is structurally abandoning speculative trading for regulated markets. The 73% drop in trade count and the 50% decline in average trade size are not a seasonal dip; they are a shift in risk appetite.
The acquisitions tell the real story. TradeZero gives eToro a regulated US brokerage license, access to options and short-selling, and a community of active equity traders. Zengo provides a self-custody escape hatch: if the SEC tightens rules on exchange-held assets, eToro can route users to a non-custodial wallet that falls outside traditional securities custody regulations. Liquidity is a narrative, not a metric. What looks like a pivot away from crypto is actually a hedge: the company is building a dual-track infrastructure to serve both TradFi and DeFi, but with the center of gravity shifting toward the former.
Contrarian: The Decoupling Myth
The prevailing narrative is that eToro is abandoning crypto because it no longer pays. I disagree. The data shows that eToro is not fleeing crypto; it is using the bear market to acquire crypto-native tech (Zengo) at a reasonable price while simultaneously securing a stable revenue stream from traditional markets. The real story is the decoupling of crypto trading from crypto value. Spot trading is becoming a commodity service with near-zero margins, while the value accrues to derivatives, staking, and self-custody infrastructure.
Bridging the gap between capital and conviction. eToro's strategy implies that the future of retail crypto is not about high-frequency speculation on centralized exchanges, but about integrated platforms that offer a suite of services: self-custody, staking, derivatives, and access to traditional assets. The 73% volume decline is not a market bottom—it is a structural redefinition of what retail participation looks like.
Takeaway: Structure Survives Where Sentiment Fades
For the crypto industry, eToro's move is a warning. The days of easy retail liquidity are over. Platforms that rely solely on spot trading volume will continue to see margin compression. The survivors will be those that build bridges between capital and conviction—offering regulated on-ramps to traditional markets while preserving the autonomy of self-custody for digital assets.
What looks like noise is often pattern. The pattern here is clear: retail capital is not coming back to crypto in the same form. The next bull run will not be about more trades; it will be about better infrastructure. eToro is positioning itself for that reality, one acquisition at a time.