Cryptocurrency Vs Stocks: What Is the Difference?

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Cryptocurrency and stocks have been a hot topic for many years. There is a lot of debate over which one is better to invest in, cryptocurrency vs stocks? In this post, we will discuss the differences between cryptocurrency and stocks.

Cryptocurrency is a type of digital currency that works as an alternative to fiat money. A cryptocurrency has no physical form and usually does not require any third party for transactions to take place. Cryptocurrencies are decentralized meaning there is no central authority or government making rules regarding their use.

Stocks are a type of security that represents ownership in a corporation. When you buy a stock you purchase it from an existing shareholder and become shareholder of the business. You receive dividends if the company makes enough money to do so, which is usually quarterly or semi-annually.

Cryptocurrency Vs Stocks: Analyzing The 10 Differences

Cryptocurrency Vs Stocks

1. Volatility

  • Cryptocurrencies are volatile but it is to be expected for this type of market. The price may change dramatically overnight or within a few days, weeks or months. This can lead to an increase in profits if you sell at the right time.
  • Stocks fluctuate on public markets.

2. Profit source

  • The biggest source of profit for cryptocurrency is from buying low and selling high.
  • Stocks have a few sources of potential profits, which include dividends if the company makes enough money to share it with shareholders. You can also sell your stocks at a higher price than you paid for them or take out a loan against them to receive income right away.
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3. Trading & Regulation

  • Cryptocurrencies are traded on public exchanges just like stocks, but there is no regulations over the cryptocurrency market.
  • Stocks trade on stock markets with all kinds of regulation, which include laws that protect investors from fraud or irresponsible actions by corporations.

4. Trading Pairs

  • Cryptocurrencies can be bought, or sold with other cryptocurrencies. For example, Bitcoin/Ethereum is a popular trading pair.
  • Stocks are bought and sold using fiat currency. Currencies like the U.S dollar, Euro or Yen can be used to buy stocks through brokers or exchanges.

5. Issuance limits

  • Cryptocurrencies have a limited supply of coins that can be mined or in circulation. Once the limit is reached no more cryptocurrency will ever exist. Cryptocurrencies are issued by miners. Bitcoin has an annual limit of 21 million coins that will ever be created.
  • There are no issuance limits on stocks, which means there could theoretically be an infinite number of shares in public companies. This also makes it possible for companies to split their stocks when the price goes up too much, which in turn increases the number of shares.

6. Ownership Rights

  • Cryptocurrencies do not require verification of ID when purchasing them. It is possible to buy cryptocurrency with cash and remain anonymous, however, if you are looking to buy cryptocurrency with a credit card or bank account the anonymity might be lost. All cryptocurrency peer-to-peer are anonymous and no personal information is attached to them.
  • When you purchase a stock, your name and contact information is provided to the company that issued it as part of their compliance with KYC (Know Your Customer) laws. This helps prevent identity theft by verifying that people receiving shares actually own those shares.
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7. Restriction

  • Cryptocurrency investments can be made by anyone all over the world, regardless of their location or citizenship status as long as they have an internet connection and a computer.
  • One of the main differences between investing in cryptocurrencies and stocks is that if you want to invest in stock markets, there are restrictions on who can buy shares. For example, some countries may allow foreign investors to trade stocks while other countries do not permit foreign investors or non-residents from buying local stocks.

8. Decentralization

  • Cryptocurrencies are decentralized meaning there is no central authority or government making rules regarding their use.
  • Stocks represent ownership in a corporation and you become shareholder of the business when you buy them from an existing shareholder

9. Market Access

  • The cryptocurrency market is accessible to everyone and it never close, even on holidays, all you just need is an internet connection and a computer.
  • The stocks market is generally accessible during business hours.

10. International transactions or transfers

  • Cryptocurrency allows you to have the ability to send money across borders, this is an awesome benefit, Crypto coin can easily be sold and bought across national borders through a centralized exchange or Decentralized exchange.
  • Stocks cannot be easily traded between countries since their values are based on local markets where investors buy them from.


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