What to Know
- eToro recorded a $7.2 million loss in crypto trading in the second quarter of 2026, compared with a $37.7 million profit a year earlier.
- Cryptoasset revenue fell to $1.35 billion from $1.91 billion in the year earlier quarter.
- The platform reported 1.4 million crypto trades in July, down 73% year over year.
- The average crypto trade size fell 50% to $182.
- Overall net contribution rose 9% year over year to $229 million, supported mainly by equity trading.
- Funded accounts increased 18% to 4.28 million.
- Adjusted diluted earnings per share came in at $0.68, above analysts’ estimate of $0.61.
- Shares fell as much as about 11% after the announcements and later traded more than 12% lower at around $29.80.
- eToro agreed to acquire U.S. brokerage TradeZero for up to $231 million in cash and stock.
- The TradeZero transaction is expected to close in the first half of 2027, subject to regulatory approvals.
Crypto Weakness Overshadows a Broader Earnings Beat
eToro delivered a mixed second-quarter update, with the trading platform reporting stronger overall performance metrics while its crypto business moved sharply lower. The company’s crypto trading result turned negative in the second quarter of 2026, producing a $7.2 million loss compared with a $37.7 million profit in the same period a year earlier. The reversal highlights how a cooling retail crypto environment can weigh on platforms even when broader trading activity and account growth remain resilient.
Cryptoasset revenue declined to $1.35 billion from $1.91 billion a year earlier. At the same time, eToro’s cost of revenue from cryptoassets also stood at $1.35 billion, leaving the crypto segment in the red for the quarter. For market participants, the figures point to a business line facing pressure from lower activity levels, reduced trade sizes, and a less favorable revenue mix than during stronger periods of digital asset speculation.
The weakness in crypto contrasted with eToro’s overall net contribution, which rose 9% year over year to $229 million. That improvement was driven mainly by equity trading, showing that the platform continued to benefit from demand outside digital assets. Funded accounts also climbed 18% to 4.28 million, suggesting that user growth remained intact even as crypto trading cooled.
Crypto Trading Activity Slows Sharply
The slowdown in crypto engagement was especially visible in July trading data. eToro reported 1.4 million crypto trades in July, down 73% from a year earlier. Average crypto trade size also fell 50% to $182. Together, those numbers show a notable contraction in both trading frequency and user commitment per transaction.
For online brokerages and multi-asset platforms, crypto revenue is often highly sensitive to retail risk appetite. When volatility, momentum, or speculative interest fades, users may reduce the number of trades they place, lower the size of each order, or shift attention to other markets. eToro’s figures reflect that dynamic, with equity trading helping to support the company’s overall net contribution while crypto activity weakened.
The company has continued to push into digital asset products despite the softer trading environment. eToro said it is developing onchain perpetual futures, a product category often associated with more active crypto traders. It also said crypto buying power is coming soon. Those initiatives suggest the platform still views crypto as strategically important, even as near-term trading data shows a steep decline from the previous year’s levels.
Shares Fall Despite Earnings Outperformance
eToro’s adjusted diluted earnings per share came in at $0.68, above analysts’ estimate of $0.61. In many earnings cycles, a beat on adjusted earnings can be enough to support investor confidence. In this case, however, the market reaction was negative, with shares falling as much as about 11% after the announcements. The stock later traded more than 12% lower in the hours following the earnings release at around $29.80.
The share-price decline indicates that investors focused less on the earnings beat and more on the crypto trading loss, falling crypto revenue, and sharp decline in July crypto activity. For a trading platform with a meaningful digital asset offering, investors may treat crypto engagement as a signal of future transaction revenue potential. When that signal weakens, even solid headline earnings can be overshadowed.
Market participants may also be weighing the company’s acquisition plans and product expansion against the uncertain pace of recovery in crypto trading. Onchain products and future crypto buying power features could deepen user engagement over time, but they also require execution in a market where activity has recently cooled. The immediate reaction in the shares suggests investors wanted clearer evidence that crypto-related growth can reaccelerate.
TradeZero Deal Expands U.S. Brokerage Reach
Alongside the earnings update, eToro announced an agreement to acquire TradeZero, a U.S. brokerage firm, for up to $231 million in cash and stock. The transaction is expected to be completed in the first half of 2027, pending regulatory approvals. The deal adds another strategic move to eToro’s expansion efforts and represents its third signed acquisition this year.
TradeZero offers commission-free U.S. stock and options trading as well as tools for short sellers. The company generated about $80 million in revenue in the 12 months through June, eToro said. For eToro, the acquisition appears to strengthen its U.S. brokerage-and-distribution capabilities at a time when equity trading is contributing meaningfully to overall net contribution.
Neither company disclosed any crypto, blockchain, or tokenization plans tied to TradeZero. That makes the agreement primarily a brokerage expansion move for now rather than a direct crypto acquisition. Still, the deal arrives as eToro continues to invest in digital asset infrastructure, leaving room for market watchers to assess how its broader product ecosystem may evolve after regulatory approvals and integration work.
Why the Crypto Segment Matters for eToro
Crypto has historically been an important source of retail engagement for multi-asset trading platforms. Digital assets can generate strong activity during periods of market momentum, but they can also be volatile from a revenue perspective. A fall in both trade count and average trade size can quickly affect revenue and profitability because fewer user interactions reduce spread, commission, or transaction-related income opportunities.
In eToro’s second-quarter figures, the crypto segment’s shift from a $37.7 million gain to a $7.2 million loss stands out because it shows more than just slower growth. It indicates that revenue and cost dynamics moved enough to erase the prior year’s profitability in that business line. While overall company metrics remained positive in several areas, the crypto figures offer a reminder that digital asset trading can swing sharply across market cycles.
The company’s continued development of onchain perpetual futures may appeal to more sophisticated crypto users who seek exposure to derivatives-style products. However, such offerings also exist in a competitive space where liquidity, user experience, risk controls, and regulatory positioning all matter. FXCOINZ will be watching whether these planned products can help offset weaker spot-style trading activity over time.
Investor Focus Turns to Execution
After the earnings release, the central question for investors is whether eToro can convert account growth and product expansion into sustained revenue gains while stabilizing its crypto business. The company increased funded accounts to 4.28 million and lifted net contribution to $229 million, both constructive signs. Yet the sharp drop in crypto trades and smaller average trade size show that not all areas of the platform are moving in the same direction.
The TradeZero acquisition also adds an execution component. If completed in the first half of 2027, subject to regulatory approvals, eToro will need to integrate a U.S. brokerage business that generated about $80 million in revenue in the 12 months through June. The acquisition could broaden eToro’s stock and options footprint, but investors may still judge the company on whether it can improve crypto economics while maintaining growth in equities and funded accounts.
For now, the quarter presents a split picture. eToro beat adjusted earnings expectations and expanded its account base, but the crypto business suffered a clear reversal. The market reaction suggests investors are demanding stronger evidence that the company’s digital asset strategy can generate profitable activity again, especially as it commits to onchain products and expands through acquisitions.
Frequently Asked Questions (FAQs)
What happened to eToro’s crypto trading business in the second quarter of 2026?
eToro’s crypto trading business swung to a $7.2 million loss in the second quarter of 2026, compared with a $37.7 million profit in the same quarter a year earlier.
How much cryptoasset revenue did eToro report?
eToro reported $1.35 billion in cryptoasset revenue for the second quarter of 2026, down from $1.91 billion in the year earlier period.
Did eToro beat earnings expectations?
Yes. eToro reported adjusted diluted earnings per share of $0.68, above analysts’ estimate of $0.61.
Why did eToro shares fall after the announcement?
Shares fell as investors appeared to focus on the crypto trading loss, weaker cryptoasset revenue, and a sharp slowdown in July crypto activity despite the adjusted earnings beat.
How much did crypto trading activity decline in July?
eToro reported 1.4 million crypto trades in July, down 73% year over year. The average crypto trade size fell 50% to $182.
What was eToro’s overall net contribution?
Overall net contribution rose 9% year over year to $229 million, driven mainly by equity trading.
How many funded accounts did eToro have?
Funded accounts increased 18% to 4.28 million, showing continued user growth across the platform.
What is eToro buying?
eToro agreed to acquire TradeZero, a U.S. brokerage firm, for up to $231 million in cash and stock, with completion expected in the first half of 2027 pending regulatory approvals.
Does the TradeZero deal include crypto plans?
Neither company disclosed any crypto, blockchain, or tokenization plans for TradeZero, making the acquisition primarily a U.S. brokerage-and-distribution move for now.
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