eToro (ETOR) reiterated its commitment to the crypto sector Wednesday even as trading activity and revenue from digital assets declined sharply in the first quarter, with CEO Yoni Assia telling CNBC he expects cryptocurrency markets to recover toward all-time highs later this year.

Market Context

The broader crypto market has faced headwinds throughout 2026, with trading volumes across major exchanges declining as Bitcoin and Ethereum prices experienced volatility following their previous cycles. Retail-focused platforms like eToro have been particularly exposed to these swings in user engagement, as casual traders pull back during uncertainty.

Analysis

Despite the revenue decline, eToro's strategic moves signal long-term conviction in digital assets. The activation of its BitLicense for New York trading—three years after initially receiving approval—opens access to one of the largest U.S. financial markets. More significantly, the $70 million acquisition of Zengo, a self-custodial crypto wallet provider completed April 30, positions eToro deeper into on-chain infrastructure and DeFi ecosystem participation.

Assia pointed to platform data showing retail investors on eToro tend to buy dips when markets fall, suggesting potential for rebound engagement if crypto recovers as he anticipates. The company appears betting that the current weakness is cyclical rather than structural, banking on renewed bullish sentiment later in 2026.

"We do expect later this year to start seeing crypto rising back to, you know, near all-time-highs and that will drive crypto engagement," Assia told CNBC. He characterized the platform's self-custodial wallet acquisition as central to bridging traditional finance with on-chain infrastructure, prediction markets, perpetuals, and broader crypto ecosystem services.

Key Numbers

- Revenue from crypto assets: $2.15 billion, down 38% year-over-year

- Net trading income from crypto derivatives: $33.4 million, down 57% year-over-year

- Overall net income: $82.4 million, up 37% year-over-year

- Total crypto trades in April: Down 32% year-over-year

- Invested amount per trade: Down 22% year-over-year

- eToro shares in pre-market trading: Down 0.61%

What to Watch

Traders should monitor whether eToro's New York BitLicense activation translates into meaningful user growth in a jurisdiction known for strict crypto regulation. The integration of Zengo's wallet services could unlock new revenue streams through DeFi participation and on-chain trading features. Assia's full-year crypto recovery thesis hinges on broader market conditions—watch Bitcoin and Ethereum price action as key catalysts for renewed retail engagement on the platform.

Upcoming earnings commentary and user activation metrics in Q2 will test whether the April activity trough represents a bottom or continued deterioration.