eToro (ETOR) Stock Gains Ground Following $70M Zengo Crypto Wallet Acquisition

Key Highlights

• Trading platform eToro has entered an agreement to purchase crypto wallet company Zengo for approximately $70 million
• Zengo leverages multi-party computation (MPC) security, eliminating seed phrase requirements
• The acquisition is designed to integrate self-custody features and decentralized trading capabilities into eToro’s ecosystem
• ETOR shares have declined more than 1% so far this year and approximately 48% over the trailing twelve months
• Citizens analyst Devin Ryan reduced his target price to $85 while maintaining a bullish outlook with ~145% potential upside

eToro (ETOR) revealed on Wednesday that it has reached an agreement to purchase Zengo, a crypto wallet service provider, in a transaction valued at approximately $70 million according to industry reports. The company’s shares experienced a modest uptick following the announcement.

Established in 2018, Zengo has amassed over 2 million users worldwide. The platform provides a non-custodial wallet solution, empowering users to maintain direct control over their digital assets without intermediary involvement.

Zengo’s architecture employs multi-party computation (MPC) technology for asset security, eliminating the traditional seed phrase requirement. This approach addresses a persistent challenge in self-custody solutions: the vulnerability associated with lost or compromised recovery keys.

eToro Group Ltd., ETOR

The acquisition brings established functionality including token swapping capabilities, staking services, and fiat currency onramps that Zengo currently provides. The wallet infrastructure will operate independently from eToro’s regulated offerings, enabling users to engage directly with third-party decentralized protocols.

Speaking on the strategic timing, eToro CEO and co-founder Yoni Assia stated, “As we often say, crypto downtimes are the time to build and this acquisition reflects that long-term approach.”

According to company statements, the purchase will enable eToro to better serve emerging cryptocurrency applications — particularly tokenized real-world assets, decentralized prediction markets, and perpetual futures contracts. The platform intends to weave Zengo’s underlying technology into its core infrastructure moving forward.

“[The acquisition] will strengthen our ability to support evolving digital asset use cases, including tokenized assets and emerging decentralized trading models,” eToro announced in an official statement.

The Zengo deal follows closely on the heels of eToro’s launch of its proprietary app marketplace, unveiled just one day earlier. This marketplace provides a centralized hub for investors and third-party developers to create and access trading tools, analytics platforms, and other functionality within eToro’s environment. ETOR shares jumped more than 4% following that app store reveal.

ETOR Stock Faces Headwinds Despite Strategic Moves

Notwithstanding recent strategic initiatives, the stock has struggled significantly. ETOR has shed over 1% since the beginning of the year and tumbled roughly 48% over the past twelve-month period.

Last week, Devin Ryan from Citizens adjusted his price target downward to $85 from a higher previous level, though this still represents approximately 145% appreciation potential from current trading levels. Ryan noted that “navigating volatility remains the central challenge” facing capital markets and fintech businesses, adding that cryptocurrency market sentiment “remains impaired” in the near term.

These headwinds were evident in eToro’s fourth-quarter financial performance. Revenue from digital assets plummeted 38% during the quarter that concluded on December 31. However, the company still managed to generate a quarterly profit of $69 million, representing approximately 16% growth compared to the same period a year earlier.

Analyst Sentiment and Price Projections

Among Wall Street analysts, the consensus rating for ETOR stands at Moderate Buy, reflecting seven Buy recommendations and three Hold ratings issued over the last three months.

The average analyst price target currently sits at $52.80, suggesting roughly 52% upside potential from present price levels.

The Zengo transaction remains subject to standard closing requirements and regulatory conditions. While eToro has not publicly verified the $70 million purchase price, Bloomberg reported the figure based on information from a source familiar with the transaction terms.