CoinDesk
eToro (ETOR) swung to a $7.2 million loss in crypto trading during the second quarter of 2026, reversing a $37.7 million profit a year earlier as cryptoasset revenue fell roughly 29% to $1.35 billion. The Tel Aviv-based platform reported crypto cost of revenue at $1.35 billion, leaving the segment roughly $7.2 million underwater, while total net contribution still rose 9% year over year to $229 million on the back of equity trading. The release landed Tuesday, with shares dropping as much as 11% after the print.
Why it matters
The crypto-side P&L is the read the market is paying attention to. Cost of revenue moved in lockstep with gross crypto revenue, so what was once a high-margin crypto engine has compressed into a roughly break-even segment. eToro's July crypto trades were down 73% year over year, with the average ticket size down 50% to $182, an engagement signal that combines shrinking participation with smaller position sizes.
The broader business is still holding up. Funded accounts climbed 18% to 4.28 million, adjusted diluted EPS of $0.68 beat the $0.61 consensus, and equity trading carried the quarter. eToro is also pushing deeper into onchain products, building perpetual futures and a "crypto buying power" feature, even as the legacy crypto retail flow softens.
Market impact
The strategic drift is one piece; the $231 million TradeZero deal is the other. The U.S. brokerage, which generated about $80 million in trailing revenue, gives eToro a commission-free U.S. stock and options book plus short-selling tools, with no disclosed crypto or tokenization plans. It is eToro's third signed acquisition this year, with closing expected in H1 2027 subject to regulatory approval.
The reaction, an 11% drop on a quarter that beat earnings, is the price tag on that strategic direction. Shares were last around $29.80, with investors weighing the cash-and-stock cost of TradeZero against a fading crypto retail book and the long road to monetizing onchain perps.
Frequently asked questions
-
How bad was eToro's crypto trading quarter?
eToro's crypto trading swung to a $7.2M loss in Q2 2026, down from a $37.7M profit a year earlier, as cryptoasset revenue fell about 29% to $1.35B and cost of revenue matched it.
-
Why did eToro shares drop despite an earnings beat?
Shares fell as much as 11% after the print because investors are pricing the strategic shift toward onchain products and the $231M TradeZero acquisition, not the adjusted EPS beat of $0.68 versus $0.61.
-
What is eToro buying with the TradeZero deal?
eToro agreed to acquire TradeZero, a U.S. brokerage offering commission-free stock and options trading plus short-selling tools, for up to $231M in cash and stock, with closing expected in H1 2027.
-
Are crypto retail traders still active on eToro?
July crypto trades were down 73% year over year and the average trade size halved to $182, signaling both fewer participants and smaller position sizes on the platform.
-
What is eToro's onchain strategy?
eToro said it is developing onchain perpetual futures and a "crypto buying power" feature, pushing deeper into onchain products even as its legacy crypto retail flow softens.
CoinTelegraph
TheBlock
CryptoSlate
Glassnode
Whale Alert
WatcherGuru