One of Most Respected Crypto Twitter Analysts Says “eToro Is The Ripoff King” Due to Trading Fees
You may have noticed that despite the bear market, crypto exchanges are still having a good time. Why is that? Because price is not really what drives them, fees are. This way, they remained strong even when other companies in the crypto world are not.
Now, Alex Kruger, an economist, has recently complained that the fees are simply too high. He believes that customers are being overcharged and cites the fees of more traditional markets like stocks and forex to affirm that show cryptos are some of the worst possible offenders when it comes to trading fees, despite having a discourse in which their fees are small.
eToro, in special, was bashed by Alex Kruger. He affirmed that “eToro is the ripoff king”. Initially, the social trading platform was missing from the list made by the economist, but he bashed it when one of his followers suggested that it was as bad as the ones which were being mentioned.
Etoro is the ripoff king.
— Alex Krüger (@krugermacro) March 28, 2019
CCN, which reported on this story, tried to contact eToro directly to talk about the allegations that the company was being called out for having unfair fees.
According to the spokesperson of the company, eToro is not an exchange but a multi-asset trading and investment platform instead. Also, the representant used the chance to affirm that eToro was still in Beta.
The company has also informed the crypto media outlet that its fees are fully transparent and that all users have acess to them, which lets them decide whether they want to pay or not. Besides the normal fees, the company also asks for a $25 USD withdrawal fee, which is generally deemed to be high.
One of the aspects that leads people to complain of eToro is mostly how the spread fees are way too big. The company may offer spread options, but they seem to be overpriced, as most users would affirm.
At the moment, eToro has over 10 million users. Most of them are from Europe, Asia and the Middle East. This shows that, despite complaining about the fees, people still like the platform.
The Analysis Of The Fees
Kruger took several exchanges in his analysis to determine their fees. eToro was possibly left out because it is an “investing platform”, not really an exchange, so it may work in a different way than the other companies.
Basically, he spotlighted the average maker fees plus the taker fees on crypto exchanges based on the concept of their “lowest volume tier”. His average after the analysis was 0.33%. When he compared to the flat fees of Fidelity, for instance, which charges $4.95 USD per transaction, he saw that people paid 0.02%, for instance, on a $50,000 USD trade.
In the forex market, fees can be even lower. People pay 0.008% of fees sometimes. Coinbase is 48 times more expensive than that, when you compare them. Even when you adjust to the very high volatility of the market, the fees simply continue to be very high.
Because of all this, his conclusion was that the exchanges should be charging considerably lower fees than they do right now. We can only hope that they will hear him out.