February 21, 2024



Some cryptocurrency traders crave attention, sharing their trades publicly and promoting themselves for others to see and copy. However, it is crucial to be wary of traders who only show their winning trades. When you check their profiles, you will see no losing trades at all.

Instead of blindly following these “perfect” traders, platforms such as Bybit and eToro offer the ability to copy trade. This feature allows you to discover traders whose strategies and performance you admire and subscribe to their updates.

Once you subscribe to your preferred traders, you can allocate a portion of your trading funds to them. By activating the autopilot feature on the platform, you can mirror their trades in real time. It’s as simple as finding a trader that resonates with you, hitting the “Copy” button, and letting the platform handle the rest.

In this article, we review the pros and cons Bybit and eToro Determine which copy trading product is better for cryptocurrency enthusiasts. But first, what does copy trading mean?

What is copy trading?

copy trade Is a form of investing or trading in which individuals copy the trading or investment strategies of other experienced traders. It allows inexperienced or busy traders to automatically copy trades executed by professionals in real time, usually through a dedicated platform offered by a brokerage or social trading network.

Copy trading typically involves selecting one or more traders whose performance and strategy align with investment goals. Once a trader is selected, their trades are automatically copied to the investor’s trading account.

Copied trades are executed proportionally to the investor’s available funds, reflecting the behavior of the selected trader. This way, investors can benefit from the knowledge and expertise of successful traders without having to actively trade or conduct in-depth market analysis themselves.

Copy trading is popular in the retail market for several reasons:

barrier free

Copy trading allows retail investors to gain access to the expertise and strategies of professional traders who might not otherwise have access to it. It allows individuals with limited knowledge or time to participate in the crypto market and potentially generate returns.

study

Copy trading can be used as a learning tool for inexperienced traders. By observing and copying the trades of successful traders, individuals gain insight into various trading strategies, risk management techniques, and market dynamics.

save time

Many retail investors have limited time to actively trade or market research. Copy trading allows them to passively participate in the market while benefiting from the trades of experienced professionals. This eliminates the need for extensive research, analysis and trade execution.

diversification

Copy trading allows investors to diversify their portfolio by following multiple traders with different trading styles and asset preferences. This diversification helps spread risk and potentially enhance returns.

Due to the growing popularity of copy trading and demand from retail investors, it has become a staple product of Bybit, eToro, and many online trading platforms and exchanges. These platforms provide the necessary infrastructure and tools to facilitate copy trading, allowing investors to browse and choose from a wide range of traders to copy. Some platforms also offer additional features such as performance statistics, risk indicators, and social interaction features to facilitate investors’ decision-making process.

Which is better? Bybit or eToro

To determine which platform has the better copy trading platform, let’s explore the pros and cons of copy trading on both platforms.

Advantages of Bybit Copy Trading

Improved integration with derivatives trading terminals

Bybit enhances its platform by trading directly in the master trader sub-account! Copy trading is integrated with the main derivatives trading terminal, allowing investors to easily copy trades of preferred traders on a single tan (instead of a separate copy trading tab).

Full set of derivatives trading functions

With the aforementioned integrations, Master Traders can now take advantage of comprehensive trading functionality. Features previously unavailable in the Copy Trading tab are now available to enhance trading with features such as conditional orders and trailing stops. This integration provides master traders with more tools and flexibility to effectively execute their strategies.

Copy trades via API

Master Traders can now execute automated strategies with the support of V3/V5 USDT Perpetual OpenAPI. This integration enables seamless execution of trading strategies, enabling Master Traders to automate their trading activities and optimize their trading performance.

Autopilot trading using third-party trading tools

Bybit now allows master traders to seamlessly connect their sub-accounts to third-party trading tools including 3Commas and Insilico Terminal via API integration.

This enables Master Traders to utilize advanced trading features and execute automated strategies to enhance portfolio management and increase profitability while effectively managing risk. Once the integration is complete, all transactions made through these third-party tools will be automatically synchronized with Bybit,

Seamless Account Management

Handle multiple master trader sub-accounts easily and conveniently. Bybit allows you to efficiently monitor and control all your sub-accounts in one place.

Easily manage transactions

Bybit has introduced enhancements specifically for master traders in the asset overview section. Selected derivatives accounts will now be clearly marked as “copy trade” accounts, providing investors with clear distinction and easy identification.

With this update, investors can access important information such as unrealized profit and loss (PnL), your share of the total profit earned, and easily export order and trade history. This feature provides a comprehensive view of trade performance, similar to how you view orders and trade history on a regular Bybit account.

Automation Strategy Badge

Recognizing the growing popularity of automated trading strategies among master traders, Bybit has introduced a new feature to emphasize its usefulness. Master traders will now have a special badge prominently displayed on their profile pages when they use an automated trading strategy.

Disadvantages of Bybit copy trading

not available in the US

Bybit copy trading is currently not available for users residing in the United States. This restriction restricts US traders’ access to the copy trading functionality, limiting their ability to take advantage of Bybit’s functionality.

geographical restrictions

In addition to being unavailable in the United States, Bybit Copy Trading may have other geo-restrictions that limit access to the feature in certain regions. These restrictions may vary according to local regulations and compliance requirements, which may prevent traders from specific countries or jurisdictions from participating in copy trading on the Bybit platform.

Advantages of eToro Copy Trading

Chat with many traders

eToro Copy Trading provides users with a variety of traders. Users can explore and select traders based on their performance, trading style and risk profile. Additionally, the platform enables users to communicate with selected traders, enabling potential knowledge sharing and insights.

Range of tradable assets

Depending on the user’s location, eToro offers a wide range of tradable assets including cryptocurrencies, stocks, forex and commodities. This provides diversification options for users to diversify their portfolio and take advantage of different market opportunities.

social trading community

eToro acts as a social trading platform, allowing users to interact with other members of the eToro community. This social aspect enhances the trading experience by enabling users to share ideas, strategies and insights with other traders. The community aspect facilitates collaboration and learning among traders.

Disadvantages of eToro Copy Trading

execution delay

A potential disadvantage of copying trades on eToro is the possibility of execution delays. Since copy trading involves copying other traders’ trades, there may be a slight delay between the execution of the original trade and its copying in your account. This delay may cause a slight difference in the price of the trade and may affect the overall performance of your copied trades.

inactivity fee

eToro imposes an inactivity fee on dormant accounts that have been inactive for a period of time. eToro may charge an inactivity fee if you do not actively participate in copy trading or any other trading activity on the platform and your account remains inactive for an extended period of time. These fees can reduce the profitability of your overall investment and should be taken into account when using eToro’s copy trading feature.

judgment

thanks to its recent Improved and updated features, Bybit beat eToro as the exchange with the best copy trading product. Also, eToro offers a variety of investment options, but only 80 cryptocurrencies. On the other hand, Bybit offers more than 350 cryptocurrencies, spot trading, futures, margin trading, perpetual swaps, options and leveraged tokens. It also provides financial services such as lending.

Regarding fees, eToro charges 1% for buying and selling cryptocurrencies, while Bybit offers more competitive fees starting at 0.1%.

However, it is worth noting that there are risks in copy trading. Past performance is not indicative of future results, and blindly copying trades without understanding the underlying strategy and risks may result in losses. It is essential for individuals engaging in copy trading to conduct thorough research, diversify their copy trades, and manage risk effectively.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.