The Main Differences Between Crypto & Stock Investing

There’s a lot of differences between investing in cryptocurrency and investing in the stock market, but what are they? What benefits are there to trading crypto or stocks and what are the drawbacks? Let’s dive in.

Here are the benefits of cryptocurrency:

•             You can trade cryptocurrency 24/7 without time restrictions.

•             Typically, the fees are negligible or very small compared to trading on regular exchanges. For example, my bank charges $10.00 per trade.

•             There is no minimum purchase amount, nor do you have to have a certain amount of money to start trading as many exchanges require.

•             Many exchanges offer ways to earn free cryptocurrency or give you registration bonuses you typically cannot get with regular exchanges.

•             You could spend no money whatsoever, earn cryptocurrency, then trade what you’ve earned to generate a much greater profit. You can get started for free.

•             You can buy fractions of a cryptocurrency in all cases while only some stock exchanges offer this.

•             Cryptocurrency is highly liquid and can be used in day-to-day transactions instantly.

•             You can use them for various things like staking, lending, collectibles, DeFi, or possibly as a utility like ENS.

•             You can mine cryptocurrency and acquire it yourself.

•             You can start your own cryptocurrency or token. I have tried this.

•             Given you store your cryptocurrency off the exchange as you should, you should never be concerned with someone else restricting your access or from hackers stealing your funds.

•             Cryptocurrency itself is highly secure and accurate, everything is tracked with 100% accuracy and everything is verified for integrity while fiat is not and is much more closely tied to stocks.

•             You don’t have to pay holding fees like with a bank for fiat or for your stock trading account.

•             How you use the coins after is anonymous or can be made to be anonymous should you choose.

•             It’s very easy to transfer compared to withdrawing or depositing a stock and is much faster.

•             With decentralized exchanges, it is easily available to anyone regardless of their banking services or location.

•             Crypto transactions are made significantly faster than fiat making it very important for remittance payments and much more.

•             Price is reliant on the entire network, not the company, and more accurately the current CEO of the company. Instead, it depends on the community, adoption, usage, and network. You don’t have to worry about one crazy CEO. Tron is a good example of how Justin Sun is a bad leader, yet the coin and community around it are very separate from his actions.

•             You have all the responsibility and blame if something goes wrong on your end.

•             Withdrawn crypto is easily tradeable aka liquid

•             Withdrawn crypto isn’t fragile and isn’t easily lost.

•             Cryptocurrency sell-offs do not have drastic negative impacts on the economy

•             Many issues associated with a traditional stock are less likely if not unable affect cryptocurrency for example, if the product from the company wasn't being bought anymore, had a shipping issue, distribution issue, production issue, or say someone working there gets COVID and they shut it all down, you'll lose money.

•             Based on code, instead of trusting them, you can verify.

•             And possibly more?

Here are some of the drawbacks to cryptocurrency:

•             Cryptocurrency is volatile.

•             There is less accountability.

•             User error can be very costly. For example, if you mismanage your keys, your crypto is gone forever.

•             There is an underlying product/service/business behind every stock while only sometimes behind a cryptocurrency.

•             Your crypto isn’t guaranteed or insured if for example the exchange you trade on gets hacked and you left your crypto on the exchange.

•             The more decentralized you go, the less support you have.

•             There is a lot of uncertainty in the space.

•             There is very little regulation and many sketchy ICOs and projects that have exit scammed etc.

•             There may be a lot of regulation coming to crypto that will negatively impact the space.

•             Major players in finance are aiming to centralize cryptocurrency.

•             You have all the responsibility and blame if something goes wrong on your end.

•             There are very few trustworthy sources of authoritative information on cryptocurrency.

•             If you do lose withdrawn cryptocurrency, you cannot get it reissued.

•             Stocks have companies, products, employees, and an inherent value behind them that you are investing in.

•             Taxation is confusing, inconsistent, and changing frequently for cryptocurrency.

•             And possibly more?

Have I missed anything? Am I wrong on any of these? Do you prefer trading stocks or crypto? How diversified is your portfolio? Let us know your thoughts in the comments below and don’t forget to like and subscribe as well!