eToro's CEO says the app added dogecoin because of its 'large and loud' fanbase - and notes shiba inu coin's similarly passionate following

• eToro added dogecoin because it is grounded in and supported by a strong community, its CEO says.
• Yoni Assia told Insider that Elon Musk's backing was another key factor in the move.
• eToro is set to go public later this year in a $10.4 billion SPAC deal, and is expanding in the US.

So far, 2021 in markets has been the year of cryptocurrencies, retail trading and special purpose acquisition companies, or SPACs.

eToro is intimately involved in all three, with the global stocks and crypto trading app set to go public later this year through a $10.4 billion merger with the FinTech Acquisition Corp. V SPAC.

But to many amateur traders and crypto fans, eToro is known as a key supporter of cryptocurrency trading around the world. It made headlines when it added dogecoin to its offering in early May, a move which helped send the meme cryptocurrency soaring around 50% to an all-time high.

Dogecoin has a 'large, loud, and funny' community - and Elon Musk

Yoni Assia, the chief executive of eToro, which he cofounded in 2007, told Insider that the real question was why it had taken so long.

"Frankly, because initially dogecoin was invented as a meme or a joke, it felt, to us, not sensible for investment purposes."

Yet Assia says eToro ultimately decided that the enthusiasm of dogecoin's fans - not least Tesla boss Elon Musk - meant the coin had a future and was worth adding.

Dogecoin has "one of the largest, loudest and funniest communities in the cryptocurrency industry," Assia says, adding that "a strong community is a very strong part of every cryptocurrency."

He adds: "And one member of that community is quite unique on its own. And that's Elon Musk."

The Tesla boss has been one of the driving forces behind the boom in dogecoin, bitcoin and cryptocurrencies in general. A tweet from him can send assets soaring or plunging.

"When one member of that community is worth $180 billion, that really changes the dynamics," Assia says.

eToro has recently added a spate of cryptocurrencies to its platform, on which people in the US and around the world can trade in digital assets.

Does it plan to add dogecoin copycat shiba inu coin, which has recently been making waves? "Unfortunately we do not comment on future listings on eToro," Assia says, "but I would say that it does seem that shiba has a passionate community around it."

The trading app tries to educate users on risk

Although dogecoin has a legion of fans, traditional financial analysts and regulators have warned speculators that they could get badly burned.

Trading apps such as Robinhood have come under fire from politicians for the "gamification" of trading and making it easier to bet large amounts on relatively unknown assets, causing many to suffer large losses.

Does Assia worry about this? "I am always concerned about risk management," he says, "which is why we try to educate our customers."

When bitcoin and other cryptocurrencies started crashing just over a week ago, eToro "educated our customers about diversification, which is the first and most important element of risk management and managing a portfolio," Assia says.

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Can the retail trading boom continue?

eToro is set to go public later this year through a $10.4 billion merger with serial SPAC-launcher Betsy Cohen's company, called Fintech Acquisition Corp. V.

The trading app, which is based in Israel, has benefited massively from the boom in retail trading brought on by the pandemic, when low interest rates, government stimulus, and lockdowns combined to push people towards online investing.

eToro's revenue grew 147% year on year in 2020 to $605 million. In the SPAC deal, the app was given an implied value of $9.6 billion.

A key question for potential investors is whether that growth can continue, justifying the lofty valuation, or whether the retail boom fades as economies reopen.

Assia argues that eToro's international footing will be key to its expansion. It is predominantly focused on Europe but has customers in more than 100 different countries.

"There is little doubt in my mind that in 10 years, we are going to see several large fintech platforms that are catering globally to retail investors," he says.

Key to eToro's plans is a push into the US. It currently offers cryptocurrencies in the US but plans to launch stock trading in the second half of the year.

The app will eventually roll out a full suite of features in the US, including its "CopyTrading" feature in which users can copy successful investors. Assia says the most-copied user gets $150,000 a month just from being imitated on the platform.

"I think the opportunity is very big," Assia says of eToro's plans. "Generally we call 2020 the rise of the millennial investor. We weren't expecting that to accelerate so much in 2021."