Starting a career as an investor and looking for the right commodity to back up with your hard-earned money is definitely not an easy process. While it may seem like something rather straightforward and simple, it is actually quite challenging and many new traders find it one of the most difficult parts of their new profession. This is a similar thing to other big decisions in one’s career. How and why do you pick a certain item over others? How can you know that you have made a good decision and that nothing will prevent you from being successful in this field?
Cryptos VS Stocks
Source: kiplinger.com
Well, the bad thing about it is that you can never be too sure simply because it is not all up to you. The markets could crash, the commodity you pick could suddenly become less profitable and no longer in demand, or some other events make disrupt the whole trade flow. Be that as it may, it is still possible to pick one thing over the other in the modern world of trading. Right now, there is a clear choice between two vastly different industries. One is the classic type of trading which is stocks, and the other is the more modern one with cryptocurrencies.
Stocks have been traded for decades in much the same way, while cryptos can still be considered new. Many believe that digital currencies are easier to deal with than stocks, but is this really the case? Join us in today’s article as we attempt to answer this important question. More importantly, we talk about the reasons why crypto trading is overall easier than trading stocks. Read on to learn more about this crucial topic and be sure to check out merca2.es for additional information.
1. It is Newer and More Popular
Getting yourself involved in something that is ever-present and constantly talked about is usually better and makes more sense than picking a thing that is less desirable. Things that are the talk of the town make more sense especially now when everything is connected and integrated with each other. Modern technologies have allowed us to read the news and educate ourselves in many new ways. The fact that cryptocurrencies are so popular worldwide means that everyone knows about them and that it is being used in all corners of the globe. It is also natural for people to pick the newer thing over something that has been there for ages. The stock market is here and it will not go away. It used to be the most attractive form of trading and everyone who wanted to invest in shares picked it as a career. However, times change and cryptos managed to take the title of the most exciting commodity to invest in and trade.
2. More Diversity
Source: investorjunkie.com
Stocks represent small bits of ownership in a company that is publicly traded. Every single stock represents a very small percentage of ownership of the entire company. The ownership is received based on the number of shares that the company has made available for investment and trade. What this means is that there is not really a lot of diversity in the stock market. A stock is a stock. While it matters which company you invest in, the general approach is largely the same. There are over 6,000 companies to invest in at the two biggest stock exchanges in the world alone, the New York Stock Exchange and NASDAQ. On the other hand, there are about 10,000 active cryptos to choose from. If you want diversity and more options to choose from, cryptos are the clear favorite. Although some 60% of cryptocurrencies are tied to Bitcoin and depend on it a lot, the stock market is quite dependent on the FAANG stocks, which are Facebook, Apple, Amazon, Netflix, and Google stocks. These makeup about 25% of the most attractive, S&P 500 companies to invest in.
3. Availability to Everyone
The general problem for those interested in trading stocks is the fact that it is not really available for just about anyone. The general image of stockbrokers implies people whose entire work time is devoted to it. On top of that, it requires more preparation, more education, and more hard work. It cannot be done as freely and comfortably as crypto trading. Investing and trading cryptocurrencies is something literally anyone can do without much preparation or homework. It has been made simple by those involved in the industry who have made it possible for anyone to open accounts and electronic wallets and start buying, selling, and trading right away. It is of course possible to trade stocks nowadays through the use of personal computers and mobile devices, but the crypto industry will always be oriented towards the common folk more than the stock market. It takes less professional knowledge to be a crypto trader than a stock trader, which is one of the biggest reasons why there are so many more people actively involved in virtual currencies.
4. Les Formality and Oversight
Source: kiplinger.com
There could be a case made about cryptocurrency and the lack of regulations and laws that would make them even more prominent. However, this is the exact reason why they are different from other currencies and other commodities to invest in. The stock exchange system is very formalized and tightly connected to the banks and the governments. It is the old system of finance and business that is (very) slowly being replaced. It can even be said that it is flawed. There are too many third parties involved at every corner. You are not dealing just with the company whose stock you own nor with the other side whom you are trading with. Since regular money is involved, it means the banks are involved, government institutions, and many other places who take a cut and overlook the transactions. With cryptos, things are much easier and more private. They are anonymous to the point that a trader does not even have to know the name or the address of the other person, just their electronic wallet address.
