eToro, an Israeli social trading and multi-asset brokerage company that focuses on providing financial and copy trading services, announced its Q2 results yesterday with the firm posting $362 million worth of total trading commissions out of which cryptocurrency trading commissions accounted for 73% of the total trading commissions earned.
According to the investor update published by eToro, the company was able to amass a total trading commission of $362 million, which is up 125% from the second quarter of 2020, where the company amassed a total trading commission of $160.8 million. Cryptocurrencies accounted for 73% or $264.26 million of the total commissions in Q2 2021, while in the second quarter of 2020, cryptocurrencies accounted for only 7% or $11.2 million.
As per the report, for the total cryptocurrency commissions, XRP accounted for the highest share, representing 16%. In terms of trading volume, Bitcoin accounted for the lion share representing 20%. The company touts $9.4 billion as assets under its administration, which is up by a billion compared to the first quarter of 2021. Bitcoin represents 22% of this amount.
According to the investor update, the company stated that it expanded its cryptocurrency-related services by adding 10 new crypto assets in recent months including the popular Dogecoin and Shiba Inu. This brought the total number of crypto assets available across the eToro platform and exchange to 29. It also added that they expanded their holistic crypto offering with the launch of ETH 2.0 staking which is being rolled out on a country-by-country basis. The platform now enables users who own ETH, ADA and TRX to earn staking rewards proportional to the amount of the underlying crypto assets held.
What they are saying
According to the letter from the CEO, Yoni Assia, “Cryptoassets drove total commissions in the second quarter of 2021, reflecting retail investors’ strong interest across the cryptos offered by eToro.”
He added that the highest traded cryptocurrencies on the platform include BTC, XRP, ETH, ADA and DOGE.
Shalom Berkovitz, CFO and Deputy CEO stated “eToro is on track to hit our 2021 forecast supported by a strong second quarter. We remain focused on growth rather than short term profitability and have therefore continued to reinvest income across our marketing channels and in the continued expansion of our product offering and global presence.”
Bottomline
The company’s Q2 net trading income of $291 million increased from $123.5 million in Q2 2020, representing a 135% increase. The company’s user base also saw a significant boost, with 2.6 million newly registered users, up 121% compared to Q2 2020. The number of trades that were placed by users grew to 127 million from 74 million in Q2 2020.
Despite the bullish performance, the company posted a net loss of $89 million, compared to a gain of $16.1 million in Q2 2020. This is primarily due to a non-cash charge of $71 million in stock-based compensation for eToro employees and $36 million of transaction costs related to the business combination with Fintech Acquisition V.
The platform is set to go public on the Nasdaq exchange via a $10 billion special purpose acquisition deal (SPAC) slated to close this quarter.
