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Should You Trade Stocks or cryptos?

trade stocks or cryptos

June 15, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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Get Into Cryptocurrency Trading Today

Investing in stocks or cryptos is among the most debated topics in the finance sector. Also, many investors and traders have doubts when it comes to stock trading. Every trader worth their salt will always explore ways to grow their assets. Among the best alternatives to stock trading is crypto trading. Although relatively new, about 13 years old, this asset has gained tremendous popularity. 

The first crypto was launched in 2009. Since then, many major firms and investors now have vested interests in the market. This has further led to the launching of thousands of cryptos. By the start of 2020, the crypto market cap had increased by 65.92% to a record $303.1 billion. More than 5 thousand cryptos are currently being traded. The worldwide growth of crypto assets continues to attract more traders and investors. It is easy to assume that crypto and stock trading work the same if you already have stock assets. 

Other traders want to confirm that crypto trading is more beneficial than stock trading before diversifying their investments. Before anything else, you should note that trading in cryptos is different from stock exchanges. This article should help you understand how both work. That will help you decide whether to invest in cryptocurrencies or stocks.

How do you get started? 

When you want to start investing in stocks, you'll be required to complete specific paperwork. This process is necessary as traditional stock trading is regulated by finance industries. When looking for a company or brokers for trading assistance, assess their qualifications. Additionally, you will need to be well-versed with declarations. Trying to learn all this will ultimately hike your stock investment cost. It will also take up a lot of your time. 

Venturing into crypto trading, on the other hand, is much simpler than you may think. To begin with, you require lesser funds if you want to start making any profits. The other reason is that the paperwork that you fill out when investing in crypto is more straightforward. It will take up less time, and you also do not need to involve intermediaries such as brokers because of complexity. Here are things that will help you decide whether to trade stocks or cryptos

1.    Making Profits 

Stock exchanges can be very challenging to trade unless you have an in-depth knowledge of how it works. The first hurdle is the amount of paperwork you need to fill out. This paperwork will also cost a substantial amount of money. Even before you initiate successful trading in stocks, you will already have spent money. After you begin, you will still need to wait to make your profits. Traditional stock trading is a long-term process meaning that you benefit only after a considerable period. 

You also need to set aside capital for extra things, including trading fees and margins. Lastly, it is crucial to know and put effort towards analyzing the business models and current news. Be sure to compare world and local economies. A successful trader in the stock market understands and interprets various indicators of recession. You could prevent significant losses by paying keen attention to things like pandemics, natural calamities, and political instability. 

2.    Insider trading 

Whether you are trading in stocks or crypto, there is the likelihood of inside trading. In stock markets, company execs such as managers and executives can use confidential information. They can use things like financial statements to gain an unfair advantage in the stock market. Unfortunately, cryptos are not immune to this. Issuing companies and large investors and holders are some of the people likely to do insider trading. 

These parties typically have access to the latest information on everything cryptocurrencies. If they decide to sell and buy coins based on this information, it negatively affects the industry and other traders. Insider traders usually take advantage of this information when major events like selloffs are coming up. 

3.    Availability for trading 

Trading stocks or cryptos is different when it comes to availability. For the traditional stock exchange markets, there are fixed trading sessions. Only a few stock markets provide traders and investors with 24/7 access. It means that you are limited to transacting within these designated timeframes. For example, if the stock market opens at 8 am and closes at 5 pm, you have to trade within this time. Furthermore, most times, it is impossible to transact during the weekend or on public holidays. 

Events that happen outside the trading sessions don't directly affect this market. You can only witness the effect of the latest events in the next trading session. Therefore, your last exchange before the close of the trading session might not reflect the current trends in your subsequent exchange opening. This reality presents a challenge where you can't plan well in advance. Most traders deal with this by refusing to hold open positions in between any trading sessions. 

Cryptocurrency trading is different from stock exchanges in several ways. For starters, it is a 24/7 market. It is also directly impacted by events. Therefore, as a fast trader, you can make trades and profit by taking advantage of current news. However, you might have to be on the internet most of the time to avoid missing out on such opportunities. If you miss out on the latest news, you risk incurring significant losses. 

Take away 

Stocks and cryptos differ in several ways. Investors that are intent on diversifying their portfolio tend to trade in both. Keep in mind that different risks accompany each of these options. For instance, cryptos tend to be very volatile compared to stocks. However, companies also go bankrupt; hence stocks also collapse overnight. 

In both scenarios, you can make losses with although for different reasons. If you were on the fence about cryptos, remember that every investment carries a certain level of risk. This market offers you valuable opportunities. Additionally, there are tools that you could use to lower risks associated with virtual coins' volatility.

Buy & Sell Cryptocurrency Instantly

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Total Market Cap The Total Market Capitalization (Market Cap) is an indicator that measures the size of all the cryptocurrencies.It’s the total market value of all the cryptocurrencies' circulating supply: so it’s the total value of all the coins that have been mined.

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Price Cryptocurrency prices are volatile, and the prices change all the time. We are collecting all the data from several exchanges to provide the most accurate price available.

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