eToro vs Binance: Which crypto exchange is better?
We put these two very different exchanges side-by-side to show key differences.
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
- The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
- The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
2. You should not expect to be protected if something goes wrong
- The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment because it's not a 'specified investment' under the UK regulatory regime – in other words, this type of investment isn't recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
- The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You may not be able to sell your investment when you want to
- There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
- Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
4. Cryptoasset investments can be complex
- Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
- You should do your own research before investing. If something sounds too good to be true, it probably is.
5. Don't put all your eggs in one basket
- Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.
For further information about cryptoassets, visit the FCA's website here.
Binance is one of the biggest crypto exchanges in the world, with 90 million users globally. But it’s known for offering controversial derivative trading on cryptoassets, which is banned in the UK.
Round 1: Vital statistics
|Offers a debit card|
|Earn returns on crypto|
|call to action||Go to site|
|Go to site|
Crypto isn’t regulated in the UK. But since 2020, the UK watchdog – the Financial Conduct Authority (FCA) – has been supervising cryptoasset firms operating from the UK for their compliance with anti-money laundering and counter-terrorism financing laws (AML/CTF). Firms which pass the FCA’s checks can be on its register; firms which don’t aren’t allowed to operate from the UK. The FCA has also banned the sale of derivatives on cryptoassets (for example futures contracts, contracts for difference and options).
eToro UK applied to become a registered cryptoasset firm and its application was granted. Binance’s UK arm, meanwhile, did not become FCA-registered, and Binance.com continued offering UK users derivative trading on cryptoassets. This led to Binance falling foul of the FCA in 2021. The FCA issued consumers a warning about Binance, and many UK banks started blocking transfers to the exchange. Since then, Binance has been taking steps to clean up its act.
Round 2: Supported coins
eToro supports most of the best known and most widely-traded cryptoassets, and that’s enough for many users. It’s also adding new cryptoassets to its platform on an almost weekly basis at the moment. For obscure altcoins, Binance has the edge.
Round 3: Supported fiat currencies
Again, most users will find the fiat support they need with eToro, but it’s worth noting that eToro does everything in dollars, so when you deposit funds it immediately gets converted from GBP to USD. That means you’ll incur a small FX fee of 0.4%.
Round 4: Costs
|Deposit Fees||None||Instant Bank Payment: 0.5GBP|
Bank Card(Visa/MC): 1.80%
|Trading Fee||1% plus spread||Maker: 0.02 - 0.10%|
Taker: 0.04 - 0.10%
|Withdrawal Fees||$5 (min. withdrawal $30)||Instant Bank Payment: 0.5GBP|
Bank Card (Visa): 1.80%
Cryptocurrency: Fees vary
|Deposit methods||Bank transfer, Credit card, Debit card, Neteller, PayPal, Skrill, eToro Money||Bank transfer, Credit card, Cryptocurrency, Debit card, Faster Payments (FPS), Apple Pay, Google Pay|
|call to action||Go to site|
|Go to site|
While Binance has the edge on spreads, its fee structure is complex and not entirely transparent. Deposit/withdrawal fees depend on which of the 600+ assets you’re transferring in/out. A GBP bank transfer in or out will usually cost £1 – not bad, except that your UK bank may block the transfer. If you have to pay in by card instead, it’s a rather painful 1.8% fee. As above, with eToro, you’ll pay a currency exchange fee from GBP as it operates in USD.
The verdict: Is eToro better than Binance?
We write lots of “vs” comparison guides, and we usually pick a winner. But in this race, there’s really only one horse – eToro. That’s because we won’t recommend a firm that’s offering services banned by the FCA – namely derivative trading on cryptoassets. Irrespective of that ban, derivatives are a very dangerous way to invest (you stand to lose more than you wager) and the underlying asset – cryptocurrency in this case – is notoriously volatile.
If you want to risk it all and use banned leveraged trades to bet on obscure altcoins (which we would not recommend) then Binance might appeal. But eToro has an impressive range of features in a slick app, plus all the cryptoasset support most of us are likely to ever need. The company’s trying to catch up, at speed, with its range of coins, too. Its main downside is those FX fees.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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