Crypto trading vs stock trading
There is a pretty significant difference between the buying, holding and trading of stock against cryptocurrencies. Stock can be purchased at the stock exchange, whereas cryptocurrency may be purchased at a cryptocurrency exchange. The major differences here are:
The hours of operation
Stock exchanges run for certain hours in the day whereas crypto exchanges typically allow 24-hour trading.
This means stock traders and investors only have certain times in the day where they can conduct their trades and use any movements in the market to shift their portfolios.
Crypto traders, on the other hand, can trade at any time of day. This means that the market movements can be significant for making trades at any point.
The different kinds of exchanges
Crypto has a range of exchanges including decentralized, centralized, and marketplaces. Each exchange offers a different feature that might make it attractive for traders. Some exchanges, like Bitcoin Motion offer excellent trading opportunities that are great for first-time and experienced traders to make a profit from favourable trades.
The regulation
Cryptocurrency is still an emerging aspect and regulation and legislation surrounding trading and buying digital currencies depends on the region. Many countries require that crypto exchanges have KYC and AML in place because of cryptocurrency’s untraceable nature. Some countries are still developing the legal framework to regulate the space and others have completely banned the trading of cryptocurrencies.
Stock exchanges require regulation and the law is incredibly strict with trading equities, with hefty penalties issued to firms for non-compliance. Each country has its own law in place regarding stock trading, but as an established industry of investment, the framework are in place.
The fees
The crypto market is decentralized and decentralized exchanges do not typically have any transaction fees. You do, however, pay a gas cost to compensate the miners and validators. Centralized exchanges usually have a small fee to make trades or withdraw crypto to fiat. Typically, there are transaction fees associated with trading equities, such as brokerage fees.
The volatility
The cryptocurrency market typically experiences more volatility than the stock market. However, the stock market is not completely free from price swings. Because of fluctuations in interest rates and unpredictable circumstances like war, inflation, and monetary policy changes, it can also susceptible to volatility.
Which is a better investment?
Traditional investment leans towards stock trading, as an established industry. Cryptocurrency is just over ten years old, with the industry still developing rapidly. Since it was launched, Bitcoin has seen incredible ROI over the years, despite the price volatility and bear markets.
According to reports, half of the millionaires researched have invested at least 25% of their funds into cryptocurrency, indicating that they see a future potential for the digital industry.
Which makes a better investment depends on the investor’s preference, region, and risk appetite.
One can never be certain about where investment opportunities might go. For those looking to invest for the long-term, both options have appeal. Stocks have the dependability of being an established industry and cryptocurrency has a short history of offering major return on investment. It’s also important to look to macro-economic factors such as inflation from the global pandemic and the global conflict between Russia and Ukraine.
Cryptocurrencies offer new opportunities that fall outside of the possibilities of stock trading. With unlimited trading hours, different regulations in place, and the emergence of new projects, there is a wealth of incredible potential in the ever-emerging indsutry.
Starting small is a great way to get to know the market, nuances in the industry, and learn what it takes to start trading.
