In today’s session of Stock vs Crypto, we look into few types of investments that are similar to Cryptocurrency investments and tradings but also share stark differences as well based on the process of operating.
Financial investments can be categorized into 2 broad types. Investing in Fixed Income, which gives you a guaranteed return to a large extent and Variable Income where the returns are never guaranteed.
Stock vs Crypto – Risks and Returns
The best part of Financial Investments is governed by the basic principle, that states, “ Greater the risk, greater the gain”. Investment in Fixed Income assets, do guarantee the safety for the investors and a particular return that is decided right at the time of making the investment. However, while comparing Stock vs Crypto ,investments made in Stock Market, Mutual Funds etc., do not guarantee fixed returns.
Hence, in order to derive profit, one has to “ Time the Market” with respect to making investments as well as redeeming the same. Experts in these fields do help out individuals with sound advice on non-guaranteed investments for their clients by helping them “ Time the Market”.
Difference between Capital Market Trading and Crypto Trading
As mentioned above, even though there are a few similarities between Stock vs Crypto, there are a few stark differences as well.
- Underlying Asset: The very fundamental difference that separates Crypto and Stocks is the underlying asset. Investments made in share by any individual or organization, make them the stakeholder of that particular company. In case of Crypto, there are no such assets or underlying security based on which the trading is carried out.
- Regulatory Body: Capital markets are controlled by a Regulatory Body who are designated to ensure that the interests of the investors are protected to an extent. In every country the Capital Market forms the backbone of the economy, and hence a regulatory body does protect not only he interest of the investors as well as shielding the country’s economy to ensure stability. For Crypto, there are no such regulatory body that ensures the safety and protection of the investor’s interests, making them highly volatile.
- Trading with Crypto: For trading in Crypto, the crux of the matter is the same as far as trading objectives are concerned. “ Buying low and selling high” applies to ant trading and investment. In the case of Crypto, the same principles are applied.
- Trading Platforms: Crypto has their own trading platform for each of their types. Since there are multiple Cryptocurrencies available, like Bitcoin, Ethereum, etc. each of them have their own trading platforms.
To sum up Stock vs Crypto differences, Cryptos share few major differences with that of the stock markets, but even though the stakes are high, they are currently standing out as a major investment asset.
In the next Session, we will be discussing the safety and security of Crypto Trading and the way it is carried out.
Suggested Crypto Topic
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