eToro crypto trades drop 73%, acquires TradeZero for up to 231 million dollars

eToro's users executed 1.4 million crypto trades in July, a 73% decline year-over-year, with the average investment per trade halving to 182 dollars. On August 11, eToro announced an agreement to acquire TradeZero for up to 231 million dollars. TradeZero is a US-focused brokerage catering to active stock traders. This acquisition aligns with eToro's strategy to expand its profitable multi-asset base rather than indicating distress from the crypto downturn. In the second quarter, eToro's net contribution rose 9% to 229 million dollars, with GAAP net income increasing 77% to 53 million dollars, suggesting that stronger equity trading offset weaker crypto contributions. eToro reported 1.346 billion dollars in second-quarter cryptoasset revenue but noted this was a gross figure, with 1.354 billion dollars in cryptoasset costs. The net trading contribution from cryptoassets was approximately 12.5 million dollars. Under the acquisition terms, eToro will pay cash and issue up to 2.5 million new Class A shares, with the deal expected to close in the first half of 2027, pending regulatory approvals. TradeZero generated about 80 million dollars in revenue for the year ending June 30, with an 81% gross margin in the second quarter. eToro also aims to enhance its US product offerings through this acquisition, while still pursuing crypto initiatives, including a previous agreement to acquire Zengo, a crypto wallet provider. As of June 30, eToro had 1.2 billion dollars in cash and short-term investments.

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