eToro's Crypto Growth and Profitability Challenges: Assessing the Long-Term Viability of U.S. Expansion in a Volatile Market

eToro's 2025 financial performance underscores its rapid ascent in the crypto market, with a 28% year-over-year increase in net contribution to $215 million and a 76% surge in assets under administration (AUA) to $20.8 billion, according to a Coinotag report. The U.S. market, a strategic focal point for the platform, has seen crypto trading volumes grow by 49% to 10.7 million trades, driven by staking services for Ethereum (ETH) and Solana (SOL), as reported by a Finance Magnates analysis. However, the company's long-term viability in this volatile landscape hinges on its ability to balance aggressive expansion with disciplined cost management and regulatory compliance.

U.S. Expansion: Strategic Gains and Regulatory Hurdles

eToro's U.S. expansion has been marked by product innovation and user acquisition. The introduction of over 100 cryptocurrencies and competitive cash interest rates of up to 4.3% has fueled a 16% increase in funded accounts to 3.73 million, as noted in a Q3 earnings release. Partnerships, such as its collaboration with Nasdaq to offer Nordic stocks in local currencies, further diversify its appeal, as reported by the Finance Magnates analysis. Yet, regulatory challenges persist. The U.S. imposes stricter limitations on Copy Trading-a feature adopted by 13% of eToro's global user base-compared to Europe, creating operational friction, according to a Yahoo Finance earnings call.

Despite these hurdles, eToro's Q3 2025 results reflect confidence in its U.S. strategy. A $150 million share repurchase program signals management's belief in long-term growth, even as the crypto division reported a $18 million net loss from derivatives trading due to high operational costs, as reported in a The Block article. This duality-robust revenue growth paired with volatile expenses-highlights the precarious balance required to sustain profitability.

Cost Management and Profitability in a Volatile Market

eToro's ability to manage costs amid crypto's inherent volatility has been critical. Adjusted EBITDA surged 43% to $78 million in Q3 2025, outpacing analyst expectations, as disciplined cost controls offset market swings, according to a Globe and Mail report. The company's diversified revenue streams-spanning crypto trading, staking, and equities-have cushioned impacts from sector-specific downturns. For instance, while equities and commodities faced headwinds, crypto trading revenue hit $56 million, exceeding forecasts by 54%, as reported by a Parameter analysis.

However, the crypto division's financials reveal vulnerabilities. Revenue from crypto asset derivatives trading reached $3.97 billion, but costs nearly matched this figure, resulting in a net loss, as reported in a The Block article. This underscores the challenge of scaling crypto services profitably in a market where price swings drive both demand and operational unpredictability.

Long-Term Viability: Balancing Growth and Risk

eToro's long-term success in the U.S. will depend on its capacity to innovate while navigating regulatory and market risks. The acquisition of Spaceship, an Australian investing app, and localized products like the U.K.'s Cash ISA demonstrate a commitment to diversification, as noted in a Q3 earnings release. Yet, the U.S. remains a high-stakes arena. Regulatory scrutiny of crypto platforms is intensifying, and the platform's reliance on retail trading-sensitive to macroeconomic shifts-poses ongoing challenges.

The share repurchase program and $150 million allocation to shareholder value suggest management's confidence in overcoming these obstacles, as noted in the Globe and Mail report. However, investors must weigh the company's growth narrative against the reality of crypto's cyclical nature. As one analyst notes, "eToro's ability to retain users during market downturns will be a true test of its value proposition," according to a Parameter analysis.

Conclusion

eToro's U.S. expansion has delivered impressive growth metrics, but its long-term viability hinges on cost discipline, regulatory agility, and the ability to convert volatile trading activity into sustainable profits. While the platform's diversified offerings and strategic investments position it well for a bull market, the path to consistent profitability in a bearish environment remains uncertain. For investors, the key question is whether eToro can evolve from a crypto trading darling into a resilient financial services brand.