eToro Buys TradeZero for Up to $231M; Crypto Trades Down 73%

eToro has agreed to buy U.S. online brokerage TradeZero for up to $231 million. The acquisition gives the multi-asset platform a dedicated active-trading arm at a time when cryptocurrency trading volumes have slumped.

The cash-and-stock transaction includes as many as 2.5 million newly issued Class A shares. It is expected to close in the first half of 2027, subject to regulatory approvals.

TradeZero, founded in 2015, focuses on frequent equity traders. It offers U.S. stocks, options and a tool that locates shares available for short selling. The brokerage generated about $80 million in revenue in the 12 months through June 30, 2026, with an 81% gross margin. eToro expects the deal to add to adjusted earnings per share in its first full year, the company said.

Chief Executive Yoni Assia said TradeZero's technology and broker-dealer infrastructure would help eToro bring new products to U.S. customers faster. The active trading community is another part of the appeal, he said.

The acquisition came alongside second-quarter results showing a sharp divergence between crypto and traditional asset trading. Total revenue fell to $1.59 billion from $2.09 billion, driven by a drop in gross crypto revenue to $1.35 billion from $1.91 billion. The cost of delivering crypto transactions also fell, to $1.35 billion from $1.88 billion. That left the segment's net trading contribution at roughly $12.5 million. eToro also earned $19.7 million from crypto derivatives.

By contrast, net trading income from equities, commodities and currencies rose 24% to $141.6 million. Equities accounted for most of the improvement, the company said.

Overall, net contribution rose 9% to $229 million. GAAP net income jumped 77% to $53.5 million. Adjusted net income increased 17% to $62.8 million, or $0.68 per share.

July data showed how quickly crypto participation has faded. Users completed 1.4 million cryptocurrency trades, down 73% from a year earlier. The average amount invested per trade dropped 50% to $182. Trading across equities, commodities and currencies was broadly unchanged at 48.5 million trades, though the average invested amount declined 23% to $207.

The purchase price of less than three times TradeZero's trailing $80 million in revenue reflects the brokerage's 81% gross margin and expected first-year earnings contribution, the company indicated.

TradeZero also complements eToro's earlier purchase of self-custodial wallet provider Zengo. Zengo expanded eToro's exposure to self-custody and tokenized assets. TradeZero pushes the company further into conventional U.S. brokerage and active stock trading.

TradeZero serves active traders who want fast execution and reliable short availability. It also offers specialist tools for frequent trading. That audience differs from the social and copy-trading users eToro is known for. The U.S. brokerage market is crowded, with established players offering advanced platforms at low cost.

eToro held about $1.2 billion in cash and cash equivalents plus short-term investments at the end of the quarter. It had 4.28 million funded accounts, up 18% from a year earlier.