Lately, we have seen a lot when it comes to stocks and cryptocurrency. There have been big and small moves in the market and big players are changing sides when it comes to the ultimate question – stock or crypto?!
A few months ago you could see some big whales switching sides and opting to invest a pretty big chunk of their money into cryptocurrency. This has brought a lot of turmoil and a lot of speculations all around. It has also brought waves of changes in both of these markets and we still see it today.
The ultimate debate over crypto or stocks when it comes to investment has surely reached everyone by now, even those not so interested in this. That is how big of a reach and how big of a deal these two things are. When weighing between these two there are certain things you need to consider if you want to create a full and downright honest picture about the choice. You have to have info that regards volatility, the investment potential as well as long term potential.
Today we will discuss that to provide you with potential answers regarding this question and we will familiarize you a bit more on the matter of crypto investments. If you want you can read more about Bitcoin Era here to start and fill in whatever is missing from our article along the way.
What most people get wrong right off the bat is that crypto and stock investment is pretty much the same. Well, the part where you invest money in them is, but what you invest in isn’t. Let’s try and elaborate on that. When it comes to stocks you have real companies that are working and producing real results and based on those results they appraise their stocks.
They are also legally bound to disclose information about their financial standings meaning they need to inform everyone what are they working with, where are they spending money, are they investing and in what and so on, you get the picture. Cryptocurrency on the other hand gives you very little for your money. When investing in crypto you are, well very honestly and simply, buying nothing but a code. The entire value of any crypto is solely depending on the sum of money which someone else is willing to pay. That’s it, that is the entire safety net for you and your investment. Now when you have the basics let’s consider a few things that will help you decide your crypto or stock battle.
When it comes to this volatility is probably the major deciding factor when it comes to investing, especially for professionals. It determines the way a certain asset is behaving in the market and it also shows the possible behaviour in the future or offers info that you can use to calculate future volatility.
Assets that have been on the market for a long time are easy to predict and they are easy to assess while the assets that have spent far less time on the markets with tendencies to “jump around” like there is no tomorrow is somewhat less desirable. But as you could see a lot of things have changed and what was once normal now isn’t that much.
When trading less volatile stocks you are investing for a long run and you are doing so without worrying about crashing and losing all your investment. Take S&P 500 for instance, this is the index fund that allows you to invest in top 500 companies around the USA and with it, you have a low volatility investment where even if one of these companies’ crashes, others will make up for that and allow smooth sailing the rest of your investment period.
In less volatile stocks you can’t make a lot of money fast and that makes them boring which is why many are opting for cryptos that are far more volatile and have very big price movements daily. What you have to be extremely careful of is a lot of pump and dump scams that are plaguing the crypto markets and outright destroying their credibility.
Investment potential and is it beginner-friendly?
When it comes to investment one thing sets people off and how hard is it to invest!? Besides that, it is in our nature to search for investments that may pay off pretty quickly and pay off more than anyone expected. This means that we are all searching for an easy investment opportunity that will yield multiple times more than what we invested.
When it comes to this the choice is easy and it will always be crypto over the stock market. Stocks are always being difficult to access and learn what to do and when to do it. There are a lot of predictions, a lot of tools and a lot of, at least basic knowledge we have to consume to be successful in it.
What is even more important is that the yield we get isn’t that big if we are not willing to sit on a certain stock for some time. Crypto on the other hand is a bit quicker and offers great yields to small investments. Sometimes it feels like gambling but as we could see in past months and more, investors left and right are pushing in to grab what they can for what they can long term and/or short term.
Long term potential
Since we just mentioned this we have to address this factor as well. This is a deciding factor in most stock market trading and every seasoned stock trader will always advise you to hold your stock as long as possible, and this has something to do with the fact that the US stock market as a whole has increased its value over the years and still is continuing to do so.
AS an example of this we will take the S&P 500 Index fund and let’s say you invested $10,000 sometime in the 1980s and you held your investment the entire time until early 2018s you would end up with a cool $700k in your pocket.
Now that is not something to neglect but as you can see it takes a long time to reach that amount of money. Long term stocks always aim for a 10+ years-long period which is something to think about. Not everyone has such comfort of investing huge amounts of money and keeping their hands off it for so long. This is why most of those people are turning to crypto and trying to utilize it in the short term in combination with its volatility.
If you invest today a specific sum the chances are that by the end of the day or by tomorrow morning you could see a 2% change up to or down. If you take a look at Bitcoin which is probably the most popular crypto, in the past 6 months it jumped up 76% which is remarkable and highly lucrative for those that tend to trade in shorter terms and try to utilize the volatility of a certain asset.