Cryptocurrency vs Stocks: Which is the Best Investment?
As the world becomes increasingly digital, the world of finance is also shifting to accommodate new forms of investment. One of the most prominent new forms of investment is cryptocurrency, which has been gaining a lot of attention and investments in recent years.
On the other hand, we got the old-school Stock Market which is over 200 years old and has been one of the main ways for someone to invest his/her money. Of course, there are other options like investing in gold, silver, other metals or even real estate.
In general, if we want to see the market sizes in terms of dollars, imagine that the amount of stocks globally is estimated to be around 106 trillion while cryptos are currently around 1 trillion. Apple for example has a total valuation of 2+ trillion, so basically has double the market cap of the crypto industry.
Cryptos should not be underestimated though. While the stock market has a value of 100 trillion in over 200 years, the crypto market had around 1 billion market cap in 2013 and 10 years later we are at 1 trillion. I consider this sign a very prominent one, to be honest.
Let's dive in further and highlight some similarities and differences that cryptos and stocks share in order to have a more clear picture of what is going on before we decided which is the best investment:
Similarities
-
Both are forms of Speculation: That means that their value is determined by the market demand for them.
-
Both are Volatile: That means that their value can change in a short period of time
-
Both can be Shady: There are many cases of both crypto and stock option related to big fraud and scams
Differences
- The Stock Market is regulated while The Crypto Market is still evolving.
- Cryptocurrency is decentralized and operates on a blockchain, while stocks are issued by companies and traded on centralized stock exchanges.
- Stocks have a more solid Supply than some Cryptos.
- Cryptos in most cases have higher Pump and Dump periods than Stocks
- You can be your own Bank in crypto while in stocks you can't.
So which one is the better investment? The answer ultimately lies in you as an investor, your goals and the risks you are up to take. Stocks offer a more established and regulated investment option, but they also tend to be less volatile. Cryptos can provide higher returns but at the same time hold more risks.
No matter what you choose though, it's important to do your own research before investing and be careful with the amounts you want to invest in. Usually, as a suggestion, you should invest amounts that won't make any impact on your life in case of a total loss. Also, be wary of the many scams that are out there. It's also sensible to diversify your portfolio in case of something goes completely out of plan!
What's Your Opinion?
Posted Using LeoFinance Beta
