Equity Markets vs. Cryptocurrency Markets: Guide for Investors

As everybody can buy stocks everybody can buy cryptocurrency, basic difference is

Key Points:

1. Stable and Volatility

2. Tangible and Intangible

3. Safety/ Speculation

4. Market manipulation

5. Regulation etc.

There have been many cases where people consider the cryptocurrency marketas another version of the stock market with no difference. The first explanation people are quick to give to cryptocurrency is that "it's like a stock." After careful and critical scrutiny, I will confirm that the Bitcoin (BTC) market is very much different from the stock market and that it is very important for investors.

Of course, they both have common trends and similarities, but the operation of crypto market is very much different from the stock market. When you invest in stock, you invest in a company, but when you invest in cryptocurrency, you invest in a currency independent of the company.

Global Equity Markets: Mixed performance

Cryptocurrencies:

*Reference Data

User Base and Revenue

Drawing the attention of investors, they should note that most of the created cryptocurrencies were created for fun with no clear blueprint and projections. Some cryptocurrencies do not even have clear-cut revenue and user base, however, they manage to record high market cap due to speculations. Most of them are labeled as a scam, and they are not backed by any company. This is so different from stocks. Almost all the public stocks in the market are backed by a company with a defined revenue and user base.

Price Volatility

Another major difference is that cryptocurrencies are highly volatile compared to the stock market. The plain truth is that cryptocurrencies have no intrinsic or tangible value. Even though Ethereum is quite different with a semi-tangible value, stocks are completely tangible value. This makes cryptocurrencies more volatile than stocks. A cryptocurrency can increase by 1000 percent in price in less than a month.

When the price of cryptocurrency falls, it means it is time to enter the market even if there is the need to raise money by selling personal belongings, but this does not work like that in stocks. The total market capitalization of the cryptocurrencies is unknown. The crypto market is also subjected to manipulation while the stock market cannot be manipulated. This gives a clear indication of why the price of one tends to fluctuate more than the other.

Recovering Hacked Assets

Also, investors should note that cryptocurrencies are vulnerable to being hacked compared to stock. A data released last year hinted that almost 4 million Bitcoins have been lost forever and still counting. The weakness arises when wallet users lose their private keys. In this case, they lose all hope of recovering their assets. Also, when hackers manage to get users private keys, the stolen coins become almost impossible to recover. In the stock market, hacked funds can still be recovered. Hacked assets are not gone forever, and investors stand a chance of gaining control over it once again. This stands as one of the gaps when comparing stock to the cryptocurrencies.

For more information about cryptocurrency market just check out Cryptocoin price index and market cap