Stocks Vs Cryptocurrency : The new normal?
Stocks Vs Cryptocurrency : The new normal?
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Importance of having a secondary source of income after the pandemic is now known to all.
Generating a passive income through timely investments which may be stocks, mutual funds or any other option found suitable based on the requirements of the investor is a method exercised by many.
Recently people have become way more active towards the stock market than they were before. Now this can be accounted as an after effect of the pandemic as well as the repercussions of falling interest rates.
Whereas emerging interest of people at large in Cryptocurrency is also seen as an upward trend in the urge of society to develop passive income sources.
When it comes to cryptos the keyword associated is ‘Blockchain’ i.e the technology on which the whole crypto market works. Several cryptocurrencies have appeared in the market till now namely Bitcoin, Ethereum or Dogecoin.
Key Differences : Buying stocks & Buying Cryptos
- Volatility : Both the markets have seen their fair share of volatility since stock market saw highly considerable fluctuations during the pandemic while Elon Musk has indirectly influenced the price of Bitcoin.
- Ownership : When an individual purchases stocks of a company he gets legal entitlement of the company such as dividend which is not the case when it comes to cryptos.
- Existence : Several generations have seen stock market unfold and leave people in dilemma of buying and selling but on the other hand cryptocurrency is still an infant.
- Regulation : Stock Exchanges making it all possible in the stock market are regulated by SEBI and the force of cryptocurrency is paced based just on demand and supply.
- Dealing : One can't simply buy and sell cryptos like shares since they are token based and use in digital wallets.
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Risk & Reward : The potential growth in cryptocurrency such as Ethereum has been around 1200% last year which is way more even including the down turns than the return in the S&P 500 Index return of around 40%.
But cryptocurrency being new can be a flop or a hit in the future market so the risk and reward ratio is highly unpredictable.
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Gourav Ahuja
Hi, i am a gamer. I play with words. I believe in persistence no matter how hard or cumbersome the path of perfection may be and due to this constant urge of achieving what i want people often think me to be abnormal but according to me i just don’t get embarrassed easily since i am already maxed out.
