eToro slides on US expansion plans as 70% crypto activity slowdown clouds estimate beat

eToro (NASDAQ: ETOR) beat Wall Street expectations for its business when it reported $53 million in Q2 net income as markets opened on Tuesday. The trading platform announced that it had reached a $231 million deal to acquire the US brokerage TradeZero in the same disclosure that also revealed a sharp drop in its crypto trading section from the year before.

The news of the estimate beat did not give the firm’s ETOR stock a much-needed lifebuoy as it continued the downtrend from the previous session. eToro is now down more than 8% in early Tuesday trading, exchanging at $31.15 per share as of this Cryptopolitan report.

The slide continues what has been a year to forget for eToro after seeing its market value drop to $2.51 billion per Google Finance. 

A GAAP net income jump of 77%

Per the documentation from eToro, the firm posted adjusted diluted earnings of $0.68 per share for the quarter ended June 30 on its Nasdaq-listed ETOR ticker. Beating the $0.61 consensus extends eToro’s streak to four consecutive quarters.

What were the headline numbers from eToro’s Q2 earnings release?

• On a GAAP basis, net income rose to $53 million from $30 million, a 77% year-on-year increase.
• Equities trading helped net contribution reach $229 million, up 9%.
• Funded accounts climbed 18% to 4.28 million.
• Assets under administration (AUM) reached $19.2 billion.
• Cash, cash equivalents and short-term investments were estimated at $1.2 billion.

CFO Meron Shani echoed a sentiment that many in the industry have shared during the quarter: customers are rotating across markets rather than any single asset class.

eToro users backed up that trend as 60% of them expanded into equities in Q2 after trading commodities between Q4 2025 and Q1 2026. Nearly 90% of that demographic also traded crypto during the same period.

Why is crypto volume down on eToro? 

The decline in crypto trading volume and activity on eToro tracked an industry-wide slowdown. Total cryptocurrency trades dropped to 1.4 million in July 2026, down 73% from 2025. Traders were making smaller moves too, as the average amount invested per trade dropped 50% to $182.

The slowdown in eToro’s crypto business showed up on its balance sheet. Revenue fell roughly 30% to $1.34 billion from $1.9 billion a year earlier. 

Equities and commodities trading have been getting a lot of the action that has left crypto trading, as they combined for $141 million in net income during a period where crypto assets contributed only $19.7 million. 

Cryptopolitan reported in July that eToro’s crypto profit had shrunk to about 5% of net trading profit in Q1 2026.

Why TradeZero matters for the US push

The acquisition is the piece aimed at fixing eToro’s weakest geography. TradeZero, founded in 2015, runs online brokerage operations across the US, Canada and international markets, and serves a base of active traders. 

eToro will pay cash plus up to 2.5 million newly issued Class A shares, with the deal capped at $231 million and expected to close in the first half of 2027, pending regulatory sign-off.

What eToro is really buying is broker-dealer infrastructure. That plumbing is harder to build than it is to acquire in the US, where launching regulated products takes more than porting over technology from another market.

TradeZero generated about $80 million in revenue in the 12 months to June 30 with an 81% gross margin, Calcalist reported, valuing it at roughly 2.9 times sales at the top of the range. Jefferies advised eToro, which called this its third acquisition signed in 2026.

“Today’s announcement is an important step in building our US business,” CEO Yoni Assia said. The company has been chipping away at that market for a while, having entered New York in April after a years-long wait for authorization under the state’s BitLicense regime.

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