Unlike the less debatable conclusion that you’d come up with Champions League betting, the same can’t be said when it comes to discussions surrounding whether it’s better to invest in cryptocurrency or stocks. Because stocks have been around for centuries and have grown to achieve a certain status in the area of reliability, there’s massive debate on whether cryptocurrencies can hold the same regard since they’ve only been around for a few years.
So, when it comes to seasoned investors, the question doesn’t necessarily lie in which one is better, but rather in which form of investing will actually align with your goals. In this article, we will be discussing both cryptocurrencies and stocks so you can make the decision on what you feel will work best for you depending on your personal motives.
Table of Contents
- Do Stocks And Cryptocurrencies Work The Same Way?
- Is Cryptocurrency A Worthy Investment?
- Are Stocks A Worthy Investment?
- How Are They Both Different?
Do Stocks And Cryptocurrencies Work The Same Way?
Investing in stocks and cryptocurrencies are not the same and each has its own set of advantages and disadvantages to consider. Firstly, cryptocurrencies and stocks can both be used to accumulate wealth despite their methods of investing being different from one another.
When you buy stocks, you’re basically a part-owner of a company and you’re referred to as a shareholder. Shares can be bought during opening hours of the stock exchange and should the stock you’ve taken interest in do well, you will receive a dividend that you can keep as cash or have it reinvested so you can gain more shares.
The stock market operates under very strict laws and regulations, and should there be any non-compliance, penalties will be issued. On the other hand, the crypto market doesn’t have to deal with international laws and regulations. The market is open 24/7 and there’s no ownership when you’re part of the crypto market. You also don’t receive dividends, but instead, you’re able to stake or lend your tokens so you can generate passive income.
Is Cryptocurrency A Worthy Investment?
Before investing in cryptocurrency, you need to familiarize yourself with the risks and benefits that come with being part of the crypto market. In recent years, the market has seen a breakthrough in investments, but to this day, you’re limited in where you can use your coins for everyday things despite regulations providing convenience.
Are Stocks A Worthy Investment?
The stock market is just as unpredictable as the cryptocurrency market so there’s just as much uncertainty in this regard. For those interested in wanting to make long-term investments, equities would be of great interest to them. Because we’re presently living in exciting times, the economy is constantly affected by many factors. Once there’s a global pandemic or a serious war that takes place, this affects several economies resulting in market inflations.
Because of these factors, the stock market is constantly experiencing a lot of volatility just like the crypto market. Therefore, you can’t predict stock prices. If you wish to realize the investment in a stock, prepare yourself by understanding market forces and economic trends which will keep you well informed of what’s going on.
How Are They Both Different?
Both the stock market and crypto market are subject to external forces and none is exempt from being regarded as volatile. But even with such a similarity, there are noticeable differences between the two.
There’s a huge difference in how both of these are traded. With cryptocurrencies, they can be bought through cryptocurrency exchanges whereas stocks are bought at the stock market. Usually, the crypto market is far more volatile than what you’d find with the stock market, but the stock market is still subject to volatility because of changes occurring with interest rates and uncertain events relating to inflation rates, wars, and changes within monetary policies.
When we look at transaction fees, the cryptocurrency market doesn’t have these because it’s decentralized. But you will be subject to paying a gas fee to compensate miners and validators who go about securing transactions taking place on the network. On the stock market, however, you do face transaction fees relating to brokerage fees, but you can trade for free on certain platforms like eToro that don’t charge commission for any trading stocks.