Social Trading’s Impact on Cryptocurrency Markets

As a leader in social trading and investing, we know just how beneficial it can be to follow the lead of experts from around the world. We have made it even easier to do this with our trading platform and its CopyTrader tool, which allows you to copy the moves of chosen top investors.

But what exactly is social trading and how can it help you to improve your cryptocurrency investing strategy? Read on to learn a bit more about what social trading is, how you can benefit from it and how it can potentially affect the cryptocurrency market.

What is social trading?

Social trading is about incorporating social elements into the practice of online trading. In simple terms, it is viewing or monitoring other traders to influence your own trading decisions. There can be subtle differences in how this is done. Sometimes investors will do this manually — they will sign up to receive notifications from certain traders and then input trades themselves when they get alerts. 

But with crypto copy trading on CopyTrader, this manual effort is eliminated. You can decide which traders to follow, or copy, on our social trading network. When they buy or sell cryptocurrency, those same moves will be made in your account.

What are the benefits of social crypto trading?

There are plenty of benefits to using a social trading network for cryptocurrency investing, including:

It saves you time. You might not have the time or ability to properly analyse cryptocurrency exchange markets that are open 24-hours a day in various global markets. With social trading, you can follow the lead of experienced investors around the world who are able to monitor and react to markets in real time. While you should periodically monitor your portfolio, copy trading offers a more passive role for users who are interested in investing but, as mentioned above, do not have the time. 

It ensures you don’t miss out. When you set up copy trades, those trades are completed as soon as the person you are following finalises them. That means you rely on an experienced trader’s timing and their decisions before any potential market moves (more on that in a bit). Whether for good or bad, if the trader you are following moves early, so do you.

It lets you learn. Cryptocurrency markets can be difficult for some to understand. Even when trades are made automatically for you, social trading is still a fantastic way to further your knowledge of cryptocurrency and investment strategy. Often, social traders will share posts about their strategies, which can be great educational tools. And by having a log of moves you have made, you can determine why the top traders you follow made their decisions.

It can be profitable. Those who are popular movers in social crypto trading often have solid track records. By copying their moves, you just might get a piece of that success for yourself. That being said, it is important to remember that there are no guarantees in investing.

How can widespread social trading affect cryptocurrency markets?

Social trading can impact the cryptocurrency market, and your investing, even if you are not taking a direct part in it. One way to think about it is like influencers on social media. If they start wearing certain clothes, many of their followers might rush out and buy those pieces. Conversely, if they say they dislike something, people might stop buying it.

Cryptocurrency pump

Similar things can happen in the world of crypto. Coordinated efforts by influential traders who are followed or copied by other traders can cause cryptocurrency exchanges to change quickly. If influential traders and their followers sell a cryptocurrency at the same time, it could cause its price to drop.

And sometimes influential traders don’t even need to buy or sell to affect markets. Revered investors with large followings can potentially change the price of a cryptocurrency based on writing an article or tweeting about it. This is similar to if someone like Warren Buffett were to give an opinion on a position — traders would flock to buy or sell accordingly, greatly affecting value.

All that being said, this will likely be less and less of an issue moving forward. As the crypto market matures in the coming years, the movements of a group of social traders will probably not have the influence required to make any significant changes to the markets.

Bringing crypto to the masses

While there are potential drawbacks to social trading right now, there are still many benefits to explore. Social trading can be a welcoming entry point for newcomers interested in investing in crypto, while also providing a fantastic educational opportunity for those who want to learn more, but might not have the time to really dig in.  

Maybe you are relatively new to trading. Or perhaps you have got your feet under you, but still are not confident about reading the market and making investment decisions yourself. Whatever the case, check out eToro’s social trading today, and see how it can transform the way you invest.

Start Social Trading Today

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. 


eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. 

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. 

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission. 

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.

You should seek advice from an independent and suitably licensed financial advisor and ensure that you have the risk appetite, relevant experience and knowledge before you decide to trade. Under no circumstances shall ADR Investors or eToro have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. Trading with ADR Investors via eToro by following and/or copying or replicating the trades of other traders involves a high level of risk, even when following and/or copying or replicating the top-performing traders. Such risks includes the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Past performance of an eToro Community Member is not a reliable indicator of their future performance. Content on eToro’s social trading platform is generated by members of its community and does not contain advice or recommendations by or on behalf of eToro | Copyright © | an eToro partner.

Past performance is not an indication of future results.
General Risk Disclosure | Terms & Conditions

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