eToro to Acquire TradeZero as Q2 Crypto Revenue Drops 30%

eToro has outlined a new step in its push to expand within the US financial market: the company said Tuesday it plans to acquire US online brokerage TradeZero. The deal is framed as part of eToro’s broader effort to build a multi-asset platform that includes equities, commodities, and digital assets.

Alongside the acquisition announcement, eToro’s second-quarter update pointed to continued volatility in its crypto business. The company reported $1.59 billion in revenue for the quarter, down from $2 billion in the comparable 2025 period. Revenue tied to crypto assets totaled $1.34 billion—down roughly 30% versus $1.9 billion in Q2 2025—while eToro also reported $1.35 billion in crypto-related cost of revenue, producing $19.7 million in net income from crypto assets. Total net income for the quarter was $53.4 million.

Key takeaways

• eToro plans to acquire TradeZero to accelerate its US expansion through an established brokerage platform.
• Crypto revenue declined sharply year over year in eToro’s latest quarterly results, even as crypto-related net income remained positive.
• Management linked engagement across asset classes, saying many commodity traders later move into equities and crypto.
• Trading activity cooled, with total crypto trades in July falling to 1.4 million (down 73% year over year).
• The TradeZero deal is expected to close in the first half of 2026 and be accretive to adjusted earnings per share in the first year post-close.

Deal aimed at deepening eToro’s US brokerage footprint

The announced acquisition of TradeZero is positioned as a strategic lever for eToro’s US expansion. eToro did not provide additional operational details in the supplied reporting, but it tied the transaction to its wider goal of becoming a multi-asset platform—expanding beyond digital assets into mainstream brokerage services.

For investors, the logic is straightforward: adding an established brokerage operator can help eToro increase its distribution and product breadth in the US, potentially supporting cross-selling among asset classes. eToro’s broader product mix already includes equities and commodities, and management has emphasized user movement between those categories and crypto.

Quarterly results show crypto remains material despite declines

eToro’s Q2 results underscore that digital assets still drive a significant share of the platform’s top line, even as performance softened versus the prior year. According to the company’s second-quarter report, total revenue came in at $1.59 billion, with $1.34 billion attributed to crypto assets.

The company reported $1.35 billion in crypto-related cost of revenue, resulting in $19.7 million of net income from crypto assets. While crypto revenue dropped about 30% compared with Q2 2025, the company still generated net income in that segment for the quarter. Separately, eToro said equities and commodities-related trading generated $141 million in net income.

That split matters because it suggests eToro is not simply dependent on crypto for profitability. Instead, crypto may be functioning more like a high-volume revenue engine with tighter economics, while other products contribute meaningfully to earnings stability.

Cross-asset behavior and shifting crypto activity

eToro’s finance leadership argued that user behavior supports its multi-asset strategy. In comments carried in the second-quarter reporting, CFO Meron Shani said that more than 60% of users who traded commodities during Q4 2025 to Q1 2026 later traded equities in Q2 2026, and nearly nine in ten of those users also traded crypto on eToro.

In practical terms, that claim points to a funnel effect: users enter through one asset class and then expand into others, potentially increasing lifetime value per customer. If that pattern holds, acquisitions like TradeZero could be viewed as not only adding brokerage reach, but also feeding eToro’s cross-asset ecosystem.

However, the same quarter also highlighted a decline in crypto engagement. eToro reported that total cryptocurrency trades on the platform fell to 1.4 million in July, representing a 73% decrease year-on-year, while the invested amount was down 50%. The contrast—crypto-related revenue down materially in Q2, alongside sharp declines in July trading—signals that user activity and capital allocation in crypto are still cooling.

Deal economics and expected timing

TradeZero contributed meaningful revenue over the period referenced in eToro’s announcement. The company said TradeZero generated about $80 million of revenue with 81% gross margins in the last 12 months ended June 30, 2026.

eToro also provided an earnings-oriented view of the transaction. The company expects the acquisition to be accretive to adjusted earnings per share in the first year after closing. Closing is expected in the first half of 2026.

From a market perspective, these economics are likely to be closely scrutinized given the crypto segment’s year-over-year decline. Even if the TradeZero purchase improves eToro’s US brokerage scale and profitability, the company will still need to demonstrate that cross-asset retention and growth can offset weaker crypto trading volumes.

In pre-market trading, eToro’s Nasdaq-listed ETOR shares were down more than 5% on Tuesday, aiming to extend Monday’s decline, according to Yahoo Finance quote data for the stock.

What to watch next for eToro and US growth

As the TradeZero deal moves toward a first-half 2026 closing, investors will likely watch whether eToro can translate brokerage expansion into higher user retention and whether crypto trading activity stabilizes after July’s sharp drop. The next quarterly filings should also clarify how eToro’s crypto economics evolve as revenues soften and costs adjust—an issue that will influence whether the acquisition meaningfully offsets ongoing pressure in digital-asset trading.