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Subject category: Entrepreneurship
Authors: Yanfeng Zheng
Published by: Asia Case Research Centre, The University of Hong Kong
Originally published in: 2018
Version: 24 April 2020
Revision date: 22-Apr-2021

Abstract

The case allows students to explore the speed with which investors are adopting social trading platforms and the issues surrounding global regulation of this growing phenomenon using eToro as an example. As the world's largest social trading platform, eToro has more than 8 million registered users across 140 countries as of early 2018. This case study examines how eToro developed an alternative investment channel for millions of retail investors and semi-professional investors, compared to conventional channels such as mutual or hedge funds. eToro's case illustrates several core claims undergirding the recent fintech trend, including democratization of investment entries, disintermediation between investors and traders, and, ultimately, financial decentralization with numerous, easily set up, small funds. The instructor can encourage students to think about how new social trading platforms and copy trading fundamentally differ from conventional investment approaches, how fintech start-ups' technologies and business models challenge existing regulations, and how eToro can further grow its business to the next level. The case can be used as part of a postgraduate-level business strategy or financial technology course or for undergraduate entrepreneurship and innovation courses.

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Abstract

The case allows students to explore the speed with which investors are adopting social trading platforms and the issues surrounding global regulation of this growing phenomenon using eToro as an example. As the world's largest social trading platform, eToro has more than 8 million registered users across 140 countries as of early 2018. This case study examines how eToro developed an alternative investment channel for millions of retail investors and semi-professional investors, compared to conventional channels such as mutual or hedge funds. eToro's case illustrates several core claims undergirding the recent fintech trend, including democratization of investment entries, disintermediation between investors and traders, and, ultimately, financial decentralization with numerous, easily set up, small funds. The instructor can encourage students to think about how new social trading platforms and copy trading fundamentally differ from conventional investment approaches, how fintech start-ups' technologies and business models challenge existing regulations, and how eToro can further grow its business to the next level. The case can be used as part of a postgraduate-level business strategy or financial technology course or for undergraduate entrepreneurship and innovation courses.

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