eToro plans to buy U.S. brokerage TradeZero for up to $231 million in cash and stock, aiming to expand its U.S. equities presence as its crypto revenue and trading activity continue to decline year over year
eToro Group is moving to deepen its U.S. footprint with a deal to acquire TradeZero, a New York-based online brokerage, for up to $231 million in cash and newly issued shares. The acquisition, announced on August 11, comes as eToro's crypto business faces continued revenue pressure and declining trading activity, signaling a strategic shift toward equities and broader U.S. market participation.
TradeZero Acquisition Details
TradeZero, founded in 2015, caters to active traders and operates with its own broker-dealer license and proprietary trading technology. According to eToro, the deal will be structured as a mix of cash and up to 2.5 million new Class A common shares, with the transaction expected to close in the first half of 2027, pending regulatory approval. TradeZero generated approximately $80 million in revenue with 81% gross margins over the 12 months ending June 30, 2026, according to company figures. eToro says the acquisition will accelerate its ability to launch new products for U.S. customers, leveraging TradeZero's technology and established trader community. The company expects the deal to be accretive to adjusted earnings per share in the first full year after closing.
Crypto Revenue Under Pressure
The move comes as eToro's crypto business continues to contract. For the second quarter of 2026, eToro reported total revenue of $1.59 billion, down from $2 billion in the same period a year earlier. Crypto assets generated $1.34 billion in revenue, a 30% drop from $1.9 billion in Q2 2025. After accounting for $1.35 billion in crypto-related costs, net income from crypto assets was $19.7 million. Meanwhile, equities and commodities trading contributed $141 million in net income, making up the bulk of the company's profit for the quarter. eToro's GAAP net income rose 77% year-over-year to $53.4 million, while adjusted net income increased 17% to $63 million. Net contribution, a key profitability metric, rose 9% to $229 million, driven by stronger equities activity.
Market Trends and U.S. Expansion
eToro's U.S. expansion has accelerated in recent years. The company has operated a registered U.S. broker-dealer since 2020, added stock trading for U.S. customers in 2022, and received a Bitlicense from the New York Department of Financial Services in 2023, enabling crypto trading in New York. The TradeZero deal follows a series of recent moves, including the planned acquisition of wallet provider Zengo for a reported $70 million and a $12.5 million investment in Extended, an on-chain perpetual futures exchange. eToro also acquired Israeli crypto exchange Bit2C. These steps reflect a broader strategy to diversify revenue streams and strengthen its position in the U.S. market as crypto trading volumes decline.
Trading Activity and Financial Position
Despite the company's push into equities, crypto trading activity on eToro's platform has continued to weaken. In July 2026, the number of crypto trades fell to 1.4 million, a 73% year-over-year decline, with the total amount invested down 50% over the same period. The company ended Q2 2026 with 4.28 million funded accounts, up 18% year-over-year, and $19.2 billion in assets under administration, a 10% increase. eToro reported $1.2 billion in cash, equivalents, and short-term investments as of June 30, 2026. Shares of eToro closed down 7.8% on August 11 at $31.35, reflecting investor concerns about the ongoing contraction in crypto trading and revenue.
eToro's acquisition of TradeZero highlights the shifting landscape for crypto-focused brokerages as they adapt to changing market conditions and regulatory requirements. The deal's structure, with a significant equity component and a multi-year closing timeline, underscores the complexity of cross-border brokerage acquisitions in the U.S. market. As eToro integrates TradeZero's technology and customer base, the company will face ongoing challenges in balancing its crypto and equities businesses amid evolving user demand and regulatory scrutiny.
