Nowadays it is easy to know who came first a hen or an egg by just searching on google. But today’s date, one question which is very frequently asked by people is whether they should invest in Cryptocurrency or in the Stocks Market.
Both have some advantages and disadvantages, so let us discuss them and determine which is the better and smart option to choose.
We are going to compare and discuss them in points and let us see where we will get more benefits and what are the features of both crypto and stocks :
1. Meaning:
What are Stocks?
First of all what are Stocks? Stocks mean Investing money in a company by buying shares of it. Here an investor invests in a physical company by buying part ownership or you can say shares of the company.
For example, if you buy stocks of Reliance Group of Company, ICICI Bank, Dimart, etc then you will be an owner of the company but it doesn’t mean that the company is your’s; you are the owner of the small part of the ownership which you have derived by buying the shares of the company.
Here you will be the shareholder who will get all the facilities that an owner gets according to their share of ownership; they will get the profits out of the business, dividends, they will have the right to control the company, etc. You can easily buy Stocks from the Stock Market and invest can your money.
Cryptocurrency
Now let us know what is Cryptocurrency. Cryptocurrency is a virtual or digital currency or you can say a coin that is made out of blockchain and is secured with the most powerful cryptography which can be used as currency as it can be exchanged.
Cryptocurrency can be made by anyone by using blockchain technology but the main question arises about how crypto or cryptocurrency is an investment
Anyone in this world can buy the crypto-coins from the internet by just paying the amount or value of the crypto. The value of the crypto is determined by the demand and popularity of a particular crypto coin.
Even if a famous person or influencer can influence the price by which its value can increase or can decrease. For example, Elon Musk’s value of dogecoin gets increased.
So if you think about it, it is impractical to invest in such a thing that does not have any physical value like Stocks where you have valid proof and a value but in crypto it is virtual and it is very much unstable In price as it is influenced by external factors and has no physical real value like stocks.
But still, we can not predict the future how will be crypto will be used as it has much potential but at present, it is not so safe to invest in.
2. Formation:
If a company wants to list there stocks in the Stocks Market they have to go through a process called an initial public offer; where they have to fulfill all the criteria and have to satisfy the govt and the regulatory body; so that it can make an offer to the general public to buy their shares.
But in the case of crypto, anyone who has the knowledge of blockchain and has the mining capability can introduce his coin in the market to the general public; for example, dodge coin which is a meme coin that was made for fun, the inventor of dodge coin has sold all his coin to buy the honda car but now the value of the dodge coin is more than the whole honda company.
The first crypto Bitcoin was made by a person named Satoshi Nakamoto using blockchain technology.
3. Prediction:
In Stock Market, we can predict the price and the future of the company. For example, if the TATA Group of Companies launches some new product or has done something good for the country.
The new funding or the company is performing well ultimately the price of the shares will increase. It is predictable again as we know that Zomato will launch its IPO. We all know that Zomato is a good and profitable company.
Ultimately if they launch an IPO in the future it will be profitable to buy that shares.
But in crypto, it is not possible to predict as the demand and external factors influence the price very easily and the price gets fluctuate from 30% to 40% in a single day, as we have seen on youtube that people are making a prediction about crypto by just looking at the graph it is very hard to do this you have to be very must be experienced about the crypto; this means if there is demand then the price will increase and if no demand then the price will decrease.
4. Mind Satisfaction or Investment Safety:
When you invest in stocks you will feel safer and more secure about your hard-earned money. As govt also supports the stock market and encourages people to invest money to employ their surplus funds.
Govt also regulates the stock market. There is no misuse or scams that can happen. A country’s stock market is directly linked with the development of the county. It also represents the health of the country’s economy.
Also, the stock market is in use for a very long time and we can trust it. But in the case of crypto, it is totally the opposite. Crypto is not safe as stocks and the Govt also doesn’t support it.
It as can affect the Banking sector. For example, crypto just banned in China. Recently India also banned it. So it is not so safe to invest in crypto as compared to stocks.
5. Returns or profit/incomes:
If you invest in stocks then you will be getting all the profits and losses as you are an owner of a small portion of the company; so you will be receiving dividends out of the surplus profit and capital gain on your investment with minimum risk of loss.
That means the returns in stocks are minimum but satisfactory as it has no high risk of loss, But in the case of crypto there are high returns and profits but with critically high risk as compared to stocks; you can get very high returns in a very short period but the high risk of loss.
If you can resist the risk you can invest in crypto because it can be profitable also, but it’s like gambling you can lose all your investment also.
So, now as we discussed all the advantages and disadvantages now you can easily decide where to invest. If you want to earn a happy small regular return then Stocks will be the best choice. It has low risk as compared to crypto.
But if you want to earn more return in a very short time. Crypto is for you but keeps in mind crypto has high risk.
If you have read it I will be happy if the information is helpful for you to invest. And if you want to invest in stocks then the best platform to invest in is Upstox. If you want to invest in crypto then I can recommend you Coinswitch.
