Copy trading: why is the market growing so fast?

Written by James Tylee, Founder of Cyber.FM

The landscape of digital finance has transformed from a speculative “wild west” into a complex, high-velocity ecosystem. Throughout 2025, this evolution accelerated dramatically, with copy trading emerging as the defining trend that democratized professional-grade strategies for retail investors. According to TRM Labs data, global crypto adoption reached approximately 861 million users in 2025. Within this expanding user base, the copy trading segment has grown substantially — with major platforms alone reporting millions of active copiers: BingX serves 2 million copiers whilst Bitget, Binance and eToro collectively host millions more across their social trading infrastructures. Conservative industry estimates suggest 10–20 million individuals now actively engage in copy trading, although the rapid platform growth throughout 2025 indicates this number may be significantly higher entering 2026. Whilst the accessibility of these tools is unprecedented, the sector remains a paradox: a world where sophisticated AI-driven portfolios exist alongside predatory social media scams. Therefore, to understand the current state of the market, one must look past the flashy dashboards and examine the mechanics, the history and the inherent risks. In 2025, there was a significant consolidation of power among a few “super-platforms” that have integrated copy trading into their core architecture. No longer a niche feature, social trading is now a primary driver of user acquisition, with this shift reflecting the realisation that manual trading in a 24/7 market is increasingly difficult for humans without algorithmic assistance.

Key platform insights

· eToro — as a pioneer in the social investment space, eToro remains a dominant force. In its second-quarter report for 2025, eToro highlighted reaching approximately 35 million registered users with assets under administration growing to over $17 billion. Its “Popular Investor” programme continues to be the gold standard for regulated social trading, often requiring lead traders to maintain multi-year track records.

· Binance — the global titan recently surpassed a monumental milestone of 300 million registered users. By leveraging its massive liquidity, Binance has successfully integrated spot and futures copy trading, attracting hundreds of thousands of “copiers” seeking to capitalise on the high frequency moves of elite market makers.

· Bitget and Bybit — these platforms have emerged as the specialist hubs for derivative copy trading. Bitget has reached 120 million users across its centralised exchange and integrated wallet ecosystem, maintaining one of the largest and most active copy trading communities globally. Bybit, known for its deep liquidity in perpetual futures, services tens of millions of users who prioritise execution speed and advanced risk management tools.

· BingX — having reached 40 million users by the end of 2025, BingX has solidified its position with over 335,000 lead traders serving 2 million copiers worldwide, generating a cumulative $580 billion in copy trading volume.

The shift toward automation is unavoidable: according to Wunder Trading’s market analysis, over 50% of all operational trading volume, and up to 99% of institutional volume, is now executed by automated systems rather than manual traders. In a market that never sleeps, human discretionary trading at scale has become practically obsolete.

Historical evolution: from mirror trading to social trading

Copy trading did not emerge from a vacuum but has been in use in the foreign exchange (FX) market since the early 2000s. Essentially, it is the concept of copying someone else’s trades and has become increasingly popular with smaller businesses in the online currency trading arena. What could be simpler than having the best traders in the world handle your trades, completely automating your trading experience? It is the latest iteration of “imitative trading”, a concept that has evolved over two decades. In the mid-2000s, the industry saw the rise of Mirror Trading and, unlike modern copy trading, mirror trading was initially algorithmic. Developers would host their automated strategies on a platform and retail investors could “mirror” those specific algorithms in their own accounts. The transition to a more human-centric model began with companies such as Covestor in the US, which is now owned by Interactive Brokers. Covestor allowed asset managers to display their actual portfolios, allowing private investors to replicate those holdings. Shortly after, Saxo Markets entered the fray with Tradingfloor.com, providing a transparent arena for long and short portfolios. Currensee, one of the first platforms to bring copy trading to the forex market, was later acquired by OANDA. However, it was eToro that truly modernised the sector by blending a social media interface with a brokerage. By treating traders similar to “assets” that could be added to a portfolio, they shifted the narrative from following a strategy to following a person.

The rise of perpetual futures: the 2025 “perps meta”

In 2025, the instrument of choice for the majority of copy traders was no longer the simple “spot” purchase. Instead, Perpetual Futures (Perps) have surged to dominate over 75 percent of total crypto trading volume. And, unlike traditional futures that have an expiry date, “perps” track the underlying asset price indefinitely. Their dominance is driven by three factors: extreme leverage availability (50x-125x), superior capital efficiency and the ability to profit in any market direction through unrestricted short selling. However, understanding the full spectrum of trading products — from spot to spot margin to perpetual futures — is essential for evaluating risk and capital efficiency.

Trading product comparison

The standout advantage of perpetual futures in copy trading is the unrestricted short-selling capability, enabling traders to profit from falling asset prices just as easily as rising ones. Additionally, the absence of expiry dates means positions can be maintained indefinitely without rolling contracts. However, spot margin trading offers a compelling middle ground often overlooked by retail traders. It provides 3x-10x leverage whilst maintaining actual ownership of the underlying cryptocurrency. This is particularly valuable for traders who want enhanced capital efficiency without the extreme liquidation risk of 50x+ leveraged perpetual contracts. However, the extreme risk of high-leverage perps cannot be overstated. At 50x or 100x leverage, a mere 1–2% move against the position results in total capital loss through liquidation. Proper risk management and lower-leverage strategies are essential to access these 24/7 pools of liquidity without exposing portfolios to catastrophic volatility.

The economics and reality of copy trading

The question remains: can you actually make money? The reality is sobering. Whilst copy trading is technically an investment, similar to buying into a fund manager or an ETF, the lack of regulation for individual “lead traders” creates a significant divide. Legitimate funds are bound by strict investment criteria and regulatory oversight. In copy trading, you are essentially trusting an unregulated individual who may be trading, based on technical analysis, news or simply a “gut feeling”. Whilst past performance is a common metric used to lure copiers, it is a poor predictor of future results. Many “star” traders on these platforms succeed during bull markets by simply buying high-beta assets, but they often fail spectacularly when the market turns. The true test of a copy trading portfolio is its performance in a bear market. Often, the best investment strategy is the simplest: buying a diversified market index and holding. Stock markets are designed to appreciate over the long term, whereas the high-turnover nature of copy trading often eats away at returns through commissions, slippage and the psychological stress of following someone else’s drawdown. For lead traders, the model is highly profitable as they earn percentages of the funds following them or referral fees from brokers. A key benefit of copy trading compared to investing in a traditional fund is that your capital remains in your own exchange account at all times. You maintain complete control: you can stop copying any trader instantly and withdraw your funds immediately — a stark contrast to traditional funds that often impose redemption windows (T+3 settlement periods, quarterly locks, or gated withdrawals during market stress). This 24/7 liquidity is a fundamental structural advantage of crypto-based copy trading platforms.

The dark side: unmasking the 2025 scams

As adoption has scaled, so has the proliferation of scammers. It is estimated that roughly 20 percent of trading volumes generated by some offshore CFD and crypto brokers now come from copy trading. This is often fuelled by a lack of oversight from social media giants, who allow “FinFluencers” to peddle high-risk schemes without verification.

Anatomy of a 2025 copy trading scam:

· the hook — scammers post videos on TikTok, Instagram or x, showcasing a lavish lifestyle: rented Ferraris, luxury villas and designer watches.

· the “free” offer — they claim they do not want your money. Instead, they offer to “teach” you or let you copy their trades for free.

· the referral — they direct you to a specific, often unregulated, offshore broker.

· the “B-book” trap — these brokers often pay the scammer a commission based on your losses or the volume of trades you generate. Neither the broker nor the “trader” cares if you make a profit. Predatory “B-book” operators profit directly from your losses by taking the opposing side of your trades internally, rather than routing orders to external markets. Whilst legitimate brokers use hybrid A/B-book models for risk management, offshore unregulated platforms frequently exploit this structure — keeping retail traders’ losses as house profit whilst paying referral commissions to social media “influencers”.

As one critic put it, investors are essentially “drinking someone else’s beer while they watch.” You bear all the risk whilst the lead trader and the broker take a guaranteed cut.

The future: AI, tokenisation and paradigm shift

Looking ahead, the next phase of this evolution is the integration of artificial intelligence and tokenisation. Traditional fund management is plagued by high operational costs and administrative friction. Traditional asset management firms face persistent inefficiency challenges, with industry cost-to-income ratios hovering around 60–70 %, according to PwC’s asset management research. This high operational overhead creates a compelling case for blockchain-based alternatives. AI is set to dismantle this structure. By using AI to manage individual portfolios and accounts directly on-chain, investors can avoid the heavy administrative costs of running a traditional fund. Tokenisation allows for 24/7 liquidity and instant settlement, making the old model of “monthly NAV reports” look like a relic of the past. In this new era, copy trading might transition from following a “person” to following a “personalised AI agent” that can manage risk across dozens of protocols simultaneously. This reduces the human error and ego that often lead to the catastrophic liquidations seen in social trading today.

Essentially, copy trading is a double-edged sword. On one hand, it offers a gateway into the complex world of perpetual futures and high-alpha strategies for those who lack the time and knowledge to study the markets. On the other hand, it can be a playground for charlatans. Don’t forget the old investment adage: “Never put all your eggs in one basket.” And remember, it is your money at the end of the day. However, in the same way tokenisation is enabling smaller investors to access assets historically only available to ultra-high-net-worth individuals, copy trading allows someone with as little as £500/$500/€500 to access AI-powered trading 24/7 and profit from asset prices that fall as well as rise.

Copy trading: why is the market growing so fast? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.