Key Highlights
- eToro finalized an acquisition deal for crypto wallet company Zengo valued at approximately $70 million
- Zengo employs multi-party computation (MPC) security architecture, eliminating seed phrase requirements
- The acquisition expands eToro’s offerings with self-custody capabilities and decentralized trading functionality
- ETOR shares have declined more than 1% since the start of the year and approximately 48% in the trailing twelve-month period
- Citizens analyst Devin Ryan adjusted his price target to $85 while maintaining a bullish outlook with potential ~145% gains
On Wednesday, eToro (ETOR) revealed its agreement to purchase crypto wallet provider Zengo in a transaction valued at roughly $70 million according to reports. Shares moved higher following the announcement.
Established in 2018, Zengo has accumulated a global user base exceeding 2 million individuals. The platform provides a non-custodial wallet solution, enabling users to maintain direct control over their digital assets without intermediary involvement.
Zengo’s architecture leverages multi-party computation (MPC) technology to safeguard assets while eliminating the traditional seed phrase requirement. This approach addresses the persistent challenge of lost or compromised private keys, a frequent concern among self-custody crypto holders.
The transaction brings Zengo’s existing functionality to eToro, including token swaps, staking services, and fiat onramps. Zengo’s wallet infrastructure will operate independently from eToro’s regulated offerings, allowing direct user engagement with external decentralized protocols.
CEO and co-founder Yoni Assia of eToro emphasized the strategic timing of the move. “As we often say, crypto downtimes are the time to build and this acquisition reflects that long-term approach,” he stated.
According to the company, this strategic move positions eToro to better accommodate emerging cryptocurrency applications, particularly tokenized real-world assets, prediction markets, and perpetual futures contracts. Integration of Zengo’s technology into eToro’s existing infrastructure will proceed following the deal’s completion.
“[The acquisition] will strengthen our ability to support evolving digital asset use cases, including tokenized assets and emerging decentralized trading models,” eToro confirmed in an official statement.
The acquisition follows closely on the heels of eToro’s app store launch announced just one day earlier, creating a dedicated ecosystem for developers and investors to create and access specialized trading and analytics applications within the platform. ETOR[[/LINK_END_3]] shares responded positively, closing more than 4% higher that day.
Recent Performance Challenges for ETOR
The recent announcements come amid a challenging period for the stock’s performance. ETOR has experienced a decline exceeding 1% since January 1st and has fallen approximately 48% during the past twelve months.
Citizens analyst Devin Ryan recently revised his price target to $85 from a higher previous level, while still projecting substantial upside potential of roughly 145% from current trading levels. Ryan identified ongoing volatility management as “the central challenge” facing capital markets and fintech firms, while noting that near-term crypto market sentiment “remains impaired.”
These headwinds manifested in eToro’s fourth-quarter financial performance. Revenue from digital assets dropped 38% in the quarter concluded December 31. The company nevertheless recorded quarterly earnings of $69 million, representing year-over-year growth of approximately 16%.
Analyst Community Perspective
The analyst consensus on ETOR currently stands at Moderate Buy, supported by seven Buy recommendations and three Hold ratings issued during the most recent three-month window.
The average analyst price target registers at $52.80, suggesting potential upside of approximately 52% from present price levels.
Final closing of the Zengo transaction remains contingent upon satisfying customary conditions. While eToro has stopped short of officially confirming the $70 million valuation, Bloomberg reported the figure based on information from a source familiar with the transaction details.
