▶️ The Main Differences Between Crypto & Stock Investing | EP#381

in LeoFinance3 years ago

▶️ Watch on 3Speak


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!


▶️ 3Speak

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Nice ... your posts are now visible on LeoFinance as well :)

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Earning multiple tokens ... the magic of Hive + Leo :)

Posted Using LeoFinance Beta

I'll definitely have to tap into this magic more haha

Check out the leo frontend :)
Much better design!

Also yiu can track your leo earnings there.

Posted Using LeoFinance Beta

Pretty cool to see your video post featured at the top of the leofinance.io front-end.

Welcome to the community :)

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Oh wow, it is! That is cool, thanks for checking it out :)

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I have a lesson on 'trading' next week - may I use this post as a reference for further discussion?
Thank you for always posting great content Scott!

Posted Using LeoFinance Beta

Absolutely, you can always reference anything of mine. You have permission forever

Posted Using LeoFinance Beta

Welcome to the community :)

Posted Using LeoFinance Beta

Mann this was a much needed comparison. I introduce a fair number of people to the space and this is some great info to be armed with when explaining crypto to people who invest in traditional markets.

Posted Using LeoFinance Beta

Thanks! Happy to share it :)

This is such an outstanding comparison of traditional stocks and cryptocurrency. It is great for experienced investors with little knowledge of the crypto-sphere as well as just regular folks!

Thanks for creating this informational video! One of the best I have viewed to date.

Posted Using LeoFinance Beta

Wow thank you so much. I will continue sharing content like this in LeoFinance :)

Posted Using LeoFinance Beta

Welcome to LEO.

In many instances, it is difficult to compare crypto to other assets. For example, all cryptocurrencies are a form of decentralized governance. Their are many non-financial aspects of crypto that do not apply to stocks... although I guess the concept of stockholders making governance decisions is not a novel concept.

Regardless, crypto can do crazy stuff. For example, I can lock Ethereum in a MakerDAO contract and extract DAI out of thin air, using the ETH as collateral.

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

Ah nevermind you got it all figured out :D

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Yeah it's not an apples to apples comparison, but nonetheless, when people are deciding which to invest in, these are the things I would consider :)

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@scottcbusiness, In my opinion at this moment Cryptocurrency is Free World and Stock Market world is Structured and backed by lot of rules. Stay blessed.

I would agree, but those rules do give people a safety net and more confidence while investing. I still go 60/40 for crypto/stocks

Yes, that's why i used the term Structured.

Have a pleasant time ahead.

Ah okay I thought you meant centralized.

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