Why I Don't Buy "Crypto Stocks"
Over the past few years, crypto currency has attracted many new investors from a wide range of backgrounds. I think that most people reading this would agree that at the very least, their is a ton of potential surrounding cryptocurrency and blockchain technology in general in terms of attracting more and more investors as time goes on.
However, as of now, the crypto space is still widely unregulated as a whole. Even in 2022, the space is still ripe with scams, rug pulls, and fraud. This is probably the main thing keeping the more risk-adverse investors away. The more risk-adverse investor usually put their money into blue-chip stocks and bonds and that's where they feel comfortable as opposed to some "magic internet money". And it's not as if there isn't good reason behind this. For one, stocks are insured, so you don't have to worry nearly as much about your funds getting stolen or scammed away. They are also more easily assessable, understandable, and a time-tested investment.
Although these days, the allure of cryptocurrency is becoming too great for even the most conservative investors. Massive house-hold names in financial institutions are now offering crypto exposure to investors through things like crypto exchange traded funds or index funds made up of "crypto companies" like MicroStrategy which have Bitcoin on their balance sheet or Riot Blockchain who have a mining operation.
In my opinion, investing in these companies that are so closely linked to the success of cryptocurrency is like using an arbitrary middle-man. Observe how the charts of MicroStrategy and Bitcoin corollate.
MSTR:
BTC:
If the stock price of these companies is so directly related to the price of cryptocurrency, why not cut out the middle man and just buy crypto? Although, the assets may not be insured, with a little learning, you can protect your crypto by taking it off exchanges and using cold storage. This is only one of the many advantages that buying real crypto has over investing in related stocks. Owning crypto includes options like lending, staking, and seemly sending your crypto to others. This is only a handful of options that the world of crypto and blockchain offers. Although still risky, I truly believe that there are plenty of crypto projects out there with fundamentals that are as solid as some top emerging tech companies.
Thanks for reading if you got this far, I appreciate the support more than anything. Please feel free to leave me a comment and tell me what you think. I know this was not the most in-depth article, but I am trying to keep my content as digestible as possible.
If I can leave you with one simple message, its: Give the blockchain a chance!
As always, have a good one,
Crypto_Creech
My other blogging sites:
Publish0x - https://www.publish0x.com/crypto-creech
Hive network - https://ecency.com/@creech/posts
noise.cash - https://noise.cash/u/Creech