Cryptocurrency has been exploding in popularity over the past few years. This might be because cryptocurrency is new or because it is an easy way to make money. Either way, investing in cryptocurrency isn't the same as investing in stocks-there are pros and cons to both. Let's explore what they are!
The pros of investing in cryptocurrency instead of stocks
The cryptocurrency market is still small enough that you can buy a significant stake in it. It's also mostly unregulated, so cryptocurrency is not as heavily affected by macroeconomic factors out of anyone's control. It's easy to buy cryptocurrency, but stocks require you to open an account with a broker before trading. No bank account? No stocks, sorry!
If cryptocurrency gets more popular, you'll make more money. Remember how cryptocurrency is not subject to macroeconomic volatility? That's because cryptocurrency is largely driven by market sentiment instead of economic factors. Once cryptocurrency becomes more widely accepted and understood, it will be less volatile than it currently is.
Cryptocurrency will, therefore, be easier to predict when investing. Also cryptocurrency prices are appreciating at a higher rate than the traditional stock market stocks have grown by an average of 8% in the past 20 years, while cryptocurrency has grown by an average of 1,300%.
The cons of investing in cryptocurrency instead of stocks
Bitcoin is taxed like property instead of stocks, which might make cryptocurrency less attractive to some. Cryptocurrency also lacks the stability that you need for retirement accounts-if cryptocurrency tanks, your savings could go down with it. You can't trade cryptocurrency using retirement accounts, either.
Also cryptocurrency exchanges are not as heavily regulated as stock markets. That means cryptocurrency is more likely to crash than stocks-it's not unheard of for cryptocurrency prices to go down 50% overnight.
Stocks, on the other hand, are a heavily regulated market. That means its LESS likely to fall by 50% overnight-it's more likely to gradually go down. Also, cryptocurrency spreads can be much wider than stocks, making it harder to buy and sell quickly without paying a significant price.
So, is cryptocurrency worth it?
Cryptocurrency is similar to stocks in its volatility, less regulated, and requires a lot of patience. If you're ready to take on the cryptocurrency market-you might make more money than with stocks! Just be cognizant that cryptos pose great volatility and risk. Overall, cryptocurrency may be worth it for you. Still, cryptocurrency is probably not worth it for people who aren't likely to invest in cryptocurrency long-term, so it's a better idea for you.
To conclude, stocks are less volatile than cryptocurrency and offer more stability with retirement accounts. They're easier to buy and sell than cryptocurrency, and they have smaller spreads. Overall stocks are worth it for many people, but cryptocurrency is worth it for those willing to take the risk.
Posted Using LeoFinance Beta
We must go with crypto. Like it or not, it's the future
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