eToro Q1 2026 Data Shows User Rotation Into Non-Crypto Assets, But DeepValue Report Holds WAIT Rating

What happened

eToro's Q1 2026 update highlights 12% y/y funded account growth and 15% y/y AUA growth, with commodities trading volumes surging fourfold, supporting the narrative that users are rotating into non-crypto assets rather than leaving the platform. The DeepValue master report, which maintains a WAIT rating and conviction of 3.5, acknowledges this shift but emphasizes that crypto still dominates revenue and recent crypto trade counts have halved. Management's expansion into 24/7 trading and wealth products aims to deepen engagement, but the report cautions that earnings remain highly cyclical and dependent on crypto trading intensity. The stock trades at ~5.9x EV/EBITDA and ~28x P/E, reflecting boom-phase earnings that may not be sustainable if crypto activity continues to decline. Overall, the data provides early signs of diversification, but the thesis requires more quarters of evidence to confirm a sustainable mix shift.

Implication

The Q1 2026 update provides early evidence that eToro's strategy to expand beyond crypto is gaining traction, with commodities and other asset classes driving volume growth. However, the DeepValue report's WAIT rating remains prudent given that crypto still dominates revenue and recent crypto trade counts have halved. Investors should monitor the next few quarters for sustained growth in non-crypto activity and stable EBITDA margins. If the diversification continues and margins hold, the stock could re-rate, but a significant crypto downturn could still derail earnings. The attractive entry point is around $28, offering a margin of safety, while a trim above $45 is warranted due to peak-cycle risks.

Thesis delta

Previously, the thesis focused on the risk of crypto dependence and declining trade metrics, with a recommendation to wait. The new data shows that users are indeed rotating into other assets, which could reduce dependency on crypto and support a more resilient business model. This shifts the thesis from pure caution to cautious optimism, but the need for confirmation over the next 1-2 quarters remains critical.