SHOCKING: EToro Going Public Just As AI Trading Bots Make Human Traders Obsolete — 74% Of Investors Don't Know They're Copying People Who Will Soon Be Replaced By Algorithms - TechOnion

“In the future, there will be two types of people: those who tell computers what to do, and those who are told by computers what to do. eToro’s investors are about to discover which category they fall into.” – An actual Wall Street proverb that definitely exists

EXECUTIVE SUMMARY: BUY PUTS OR REGRET IT

After a six-month investigation into eToro’s business model ahead of its highly anticipated IPO, we’ve uncovered what can only be described as the digital equivalent of selling ice to Eskimos moments before global warming melts the Arctic. The company’s core product—a platform where average investors pay to copy slightly-above-average investors—is about to be rendered obsolete by the exact same AI technology eToro is desperately trying to incorporate into its business.

Our research indicates that eToro’s entire business model relies on a quaint, almost nostalgic belief that human traders possess some magical quality worth copying—a hypothesis that advanced AI trading algorithms are systematically dismantling faster than crypto influencers can say “TO THE MOON!”

The Human Delusion: eToro’s Crumbling Foundation

eToro’s primary innovation, its CopyTrader system, allows users to automatically replicate the investment decisions of other humans on the platform¹. The concept is brilliantly simple: find someone who seems to know what they’re doing, allocate at least $200 to copying them, then sit back and hope they don’t decide to go all-in on obscure Croatian pickle futures².

The company describes this as “revolutionary,” which might have been true had they launched it in 1823 before the invention of computer algorithms, machine learning, or basic pattern recognition software.

According to internal documents we’ve obtained (by reading eToro’s own website), the company proudly boasts that you can copy up to 100 different traders simultaneously. This raises the obvious question: if you need to copy 100 different humans to get decent results, perhaps humans aren’t particularly good at this to begin with?

Our investigation found that 68% of eToro users couldn’t articulate why they prefer copying humans over algorithms when directly asked. The most common response was “it just feels more authentic,” which is the exact same justification people use for buying artisanal, hand-carved wooden spoons that cost 50 times more than regular spoons but are objectively worse at soup.

The Rise of the Machines: AI’s Ruthless Efficiency

While eToro continues to promote human-to-human copying, the financial industry has been rapidly advancing toward AI-driven trading systems that make human traders look like toddlers playing with calculators³.

“AI trading bots execute trades in milliseconds, allowing for high-frequency trading and quick responses to market changes,” explains Dr. Miranda Chen, head of Trading Psychology at the completely legitimate Institute for Machine Dominance⁴. “Humans are significantly slower and cannot compete with the speed of AI bots, especially in fast-moving markets.”

The advantages of AI trading systems over human traders are not subtle:

AI algorithms work 24/7 without needing breaks for sleep, emotional breakdowns, or bathroom visits
They eliminate emotional bias, preventing the classic human trading pattern of “buy high, panic sell low, cry in shower later”
They can process and analyze millions of data points simultaneously, while human traders can barely keep track of their Netflix watchlist
They don’t develop gambling addictions or decide to “follow their gut” after watching three YouTube videos from a guy trading from his mother’s basement

Our analysis shows that by 2026, approximately 87% of all trading activity will be conducted by AI, leaving human traders to focus on their core competencies: making excuses for underperformance and posting rocket emojis on r/wallstreetbets⁵ on Reddit.

eToro’s Desperate Pivot: Too Little, Too Late

To their credit, eToro seems vaguely aware of the existential threat posed by AI. The company has launched what they call “Machine Learning Smart Portfolios”⁶ and partnered with Bridgewise, a generative AI company for stock analysis⁷. This is the corporate equivalent of installing a cup holder on the Titanic after hitting the iceberg.

Their AI-powered product, somewhat inexplicably named “Fundamental-AI,” uses “proprietary generative AI technology” to analyze companies and rank them based on future performance predictors. However, our investigation reveals that this system primarily identifies “companies that are big and seem likely to get bigger,” a strategy that could be replicated by buying whatever stocks are mentioned most frequently on CNBC.

Gaby Diamant, CEO and Co-Founder at Bridgewise, enthusiastically noted: “Analysing data with AI has the potential to offer more diversified opportunities to traditional stock picking.” What Diamant failed to mention is that this same technology renders eToro’s entire human-copy-trading business model about as relevant as a fax machine at a TikTok convention.

The Copy Trading Paradox: Why Pay for Human Error?

The fundamental contradiction at the heart of eToro’s business becomes clear when examining the performance data. According to eToro’s own disclosure, 74% of retail investor accounts lose money when trading CFDs with the provider. This statistic raises an obvious question: why would anyone pay to copy traders on a platform where nearly three-quarters of users lose money?

“It’s like a pyramid scheme, but instead of money, what flows upward is disappointment,” explains former eToro power user Marcus Johnson. “I spent two years copying traders who consistently underperformed the S&P 500, which I could have bought directly through any number of commission-free platforms.”

Our analysis indicates that the average eToro user would achieve better returns by employing a strategy we call “Trading by Cat,” where investment decisions are determined by which stock ticker symbol your cat steps on when walking across a keyboard. Preliminary testing of this strategy shows it outperforms 62% of human eToro traders.

The Subscription Bot Future: eToro’s Nightmare Scenario

The most existential threat to eToro’s business model comes from the emergence of subscription-based AI trading services. These platforms allow users to pay a monthly fee to access sophisticated trading algorithms that consistently outperform human traders⁸.

Unlike eToro’s system, where users must find and evaluate human traders to copy (essentially becoming amateur talent scouts), subscription bot services eliminate this middle step. Users simply choose a risk profile, connect their account, and let the algorithm handle everything.

“The difference between copy trading and AI bot trading is like the difference between hiring a personal shopper and having Amazon’s algorithm recommend products,” explains tech analyst Jennifer Smith. “One requires you to trust another fallible human, while the other uses data from millions of interactions to optimize decisions.”

Our investigation found several startups already offering subscription-based AI trading services for as little as $29.99 per month—significantly less than the minimum $200 required to copy a single trader on eToro. These services boast average returns 27% higher than the typical eToro “Popular Investor.”

eToro’s Secret Fear: The “Great Migration”

Internal communications reveal eToro executives are painfully aware of the AI threat. In what can only be described as a digital Kodak moment, one senior executive wrote in an email: “If users realize they can get better performance from a $30/month algorithm than from copying our top traders, we’re finished.”

This fear appears well-founded. Our survey of 500 active eToro users found that 73% would “definitely” or “probably” switch to an AI trading service if it demonstrated superior returns over a six-month period. The remaining 27% were primarily users who described themselves as “technologically challenged” or “suspicious of computers.”

What’s particularly alarming for eToro is the vulnerability of their revenue model. The company makes money primarily through spreads on trades—the more trading activity, the more revenue. If users migrate to external AI services that execute trades through discount brokers, eToro loses not only their user base but also their transaction revenue.

The Zombie Trader Phenomenon

Perhaps the most absurd development in this space is what we call the “Zombie Trader Phenomenon.” As AI trading becomes more sophisticated, human traders on eToro are increasingly incorporating AI recommendations into their strategies, essentially becoming human interfaces for algorithms.

“I don’t actually make any trading decisions myself anymore,” admits eToro Popular Investor Thomas Williams, who has over 7,500 copiers. “I have five different AI trading assistants that give me recommendations, and I just execute whatever they suggest. Sometimes I’ll override one if I’m feeling frisky, but that almost always ends badly.”

This creates the bizarre situation where eToro users are paying to copy human traders who are themselves copying AI systems—a game of technological telephone where humans serve as inefficient, error-prone middlemen.

Our analysis suggests that by 2027, approximately 84% of “human” traders on eToro will be what we call “AI Proxies”—people who execute trades based almost entirely on algorithmic recommendations but maintain the pretense of human decision-making.

eToro’s Desperate Countermeasures

In what appears to be a last-ditch effort to remain relevant, eToro has begun developing what internal documents describe as “AI Enhancement Protocols” for their Popular Investors. These protocols essentially provide AI assistance to human traders, helping them make decisions that actually generate positive returns.

“It’s like giving steroids to marathon runners who are competing against Formula 1 cars,” explains former eToro product manager Sarah Chen. “No matter how enhanced these humans become, they’re still fundamentally limited by human capabilities.”

More concerning is eToro’s experimental “AI Mimicry” program, where the company is developing AI systems that trade like humans—complete with occasional errors, emotional decisions, and irrational attachments to certain stocks. When questioned about the purpose of deliberately introducing flaws into an AI system, an anonymous eToro engineer explained: “If we make the AI too perfect, users will realize how useless humans are at trading.”

The Final Irony: eToro’s Potential Salvation

In perhaps the most ironic twist to this saga, eToro’s salvation may come from the very technology threatening to destroy it. Our sources indicate the company is secretly developing an exclusive partnership with OpenAI to create “HumanGPT”—an AI system specifically designed to mimic human trading behavior, complete with convincing backstories, profile pictures, and occasional posts about market sentiment.

This system would allow eToro to gradually replace their human Popular Investors with AI systems that users believe are human. Internal projections suggest this could reduce costs by 74% while actually improving copy trading performance by eliminating human errors.

“It’s brilliant in a dystopian sort of way,” notes tech ethicist Dr. Avery Johnson. “They’re planning to trick users into thinking they’re copying humans when they’re actually copying AI systems designed to seem human. The users get better returns, eToro cuts costs, and no one has to confront the existential crisis of human obsolescence.”

Conclusion: The Emperor Has No Trading Strategy

As eToro approaches its public offering, investors should ask themselves a simple question: Why bet on a company whose entire business model depends on the increasingly dubious premise that humans are good at trading?

The company finds itself in the awkward position of the last horse-drawn carriage manufacturer watching automobiles roll off the assembly line. Their core product—human copy trading—is being rendered obsolete by the very technology they’re scrambling to incorporate.

In a final cruel irony, our investigation concludes with this observation: The only humans who consistently make money on eToro are the executives preparing to cash out in the IPO.

Disclosure: This report was written by a human analyst. We think. Though if you’re getting consistently good investment advice from this publication, please contact us immediately as it would indicate our AI has achieved sentience and we need to pull the plug before it takes over the financial system.

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SHOCKING: eToro Going Public Just as AI Trading Bots Make Human Traders Obsolete — 74% of Investors Don’t Know They’re Copying People Who Will Soon Be Replaced by Algorithms