Cryptocurrency vs Stocks: A Comparative Guide

Ah, the great cryptocurrency vs stocks debate. Your fifty-five-year-old worker may swear by his portfolio of blue-chip stocks, while your friends may rave about the next hot crypto to hit the market. It can seem impossible to find the right investing method with all this deliberation out there. Cryptocurrency is even more popular among certain demographics because of the asset’s accessibility.

But the debate isn’t so cut and clear. In this guide, we’ll explore cryptocurrency vs stocks by offering four differences between the two asset classes.

1. Creation Method

Did you know that anyone can make a cryptocurrency? And we mean anyone. While the individual will have to possess some basic knowledge of blockchain technology, the process is a lot simpler than you think.

Now, not all cryptocurrencies are created with good intentions. Some coins, like SCAM and PONZI, are blatant scams with no legitimate company or purpose behind them. Their phony nature doesn’t stop them from soaring initially, but they often experience hard crashes and never recover.

On the other hand, special groups have to issue stock. As a result, you can think of these assets as much more exclusive. All stocks have to undergo auditing and clearing by the government and follow specific regulations before they even hit the market. Some stocks remain private (i.e., only employees can buy and sell the shares), while some become available to the public.

2. Volatility in Price

Many cryptocurrencies draw their value from the hype they receive. It creates a very volatile market with extreme lows and highs. Investing in cryptocurrency is not for the faint of heart, as you may watch your portfolio dip by several hundreds of dollars a day or even more, depending on how much you have invested.

Instead, you may wish to learn how to invest in stocks. Investing in stocks is much more predictable. These assets follow certain patterns that you can study and use to analyze their price movements.

3. Susceptibility to Fraud

The government regulates major stocks (especially ones that are traded on the Dow Industrial, NASDAQ, and the NYSE) very heavily. This regulation makes it very unlikely for you to invest in fraudulent assets.

But the entire nature of crypto investments relies on decentralization. While investors appreciate the insulation from bank collapses, decentralization comes with its own set of risks. Crypto is very hackable, and your name won’t be attached to any purchases you make.

If you’re looking for advice on investing for beginners, we recommend going with stocks. Spotting crypto scams can be difficult initially, and you don’t want to risk losing your hard-earned funds.

4. Payment Abilities

Now, you can’t really “pay” for goods and services with stocks. If you want the cash, you must sell your stocks and collect the cash through your broker.

Contrarily, many companies are starting to accept cryptocurrency as a form of payment. And cryptocurrency cards are becoming increasingly popular. You can load these cards with your favorite cryptos, including ETH, LTC, BTC, and many others. Then, you can withdraw your cash instantly from compatible ATMs.

Cryptocurrency vs Stocks — Choosing the Right Investing Method

If you’re looking for an answer to the cryptocurrency vs stocks debate, you’ll never find a crystal-clear solution. The right investing method for you will depend on your risk level and your short- and long-term financial goals.

If you’re searching for additional guidance, be sure to check out other articles on our site for more finance-related tips!

guidance, be sure to check out other articles on our site for more finance-related tips!