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Cryptocurrency has brought us some high-profile stories about people who got in early and picked the right crypto to invest in, and those stories have been around even longer when it comes to stocks and shares, like the tale of David Choe, who first painted the walls of Facebook’s offices back in 2005, and accepted shares in payment rather than money. This move made Choe millions of dollars, with some people referring to him as the “best-paid decorator alive”.
Bitcoin’s early adopters may have some similar stories, and the world of investing in crypto and in stocks and shares probably has more in common than it has that separates it, as we’re exploring in this guide.
One Key Difference: Crypto is Designed to be Used
Stocks are there to be traded, and by their very nature, they have been designed to be held as assets in the majority of instances, so they don’t have an everyday use in the same way that a currency does. Cryptocurrencies, on the other hand, are designed to be used on a daily basis, the original idea was to replace traditional currencies, rather than to be an investment portfolio piece, but with the growth some cryptocurrencies experienced savvy investors were more than interested.
Crypto’s use in recent years has become more mainstream and that is in large part down to the casino industry and gambling, which has proven to be an ally for crypto with some big-name celebrities even sharing their experiences gambling using Bitcoin and crypto. Drake is a famous user of crypto gambling sites, for example.
Games played in casinos hundreds of years ago have been brought into a modern age with the mainstream adoption of crypto, and crypto baccarat is a way for people to play a classic game once played with a dealer in person, by moving their cryptocurrency digitally into a casino account and using an online interface rather than a human dealer – a sign of the times and the way things have changed.
Poker, other casino games, and sportsbook gambling have all embraced crypto too, with some studies saying there are more cryptocurrency transactions in the gambling industry than in any other industry.
Similarities
Similarities in the two assets are easy to find.
Both are “supply and demand” markets, which means the main thing that defines them is the perception and whether people are currently investing. Stock prices may go up if more people want to buy shares in a specific business, which is where the “demand” aspect comes from.
Both crypto investing and stock investing are more accessible than ever to people who are interested, and people can move their money, buy stocks, buy crypto, or trade all from their phones and other devices. Gone are the days of having to fill out complex forms and send them via the post, or make phone calls to initiate a trade.
Research is crucial for both, and whenever people want to trade in stocks or in cryptocurrencies they should spend some time researching the markets and make their own judgment based on the information available.
People May Specialize in One Type of Stocks
Unlike cryptocurrencies, in the stock market, there is a huge variety of different types of stocks and companies, plus different portfolios people may invest in. Keeping track of all of the industry news and what is going to happen within can be a big task.
Industries have times when their stocks are more successful, while there are some examples of times when more people tend to invest in other industries, for instance, tech stocks and shares tend to have times of growth and stagnation, posing a challenge for those who are investing. Investors may decide that they want to know more about one specific industry and focus on the news for that specific section of the stock market.
More Americans Currently Own Stocks
As many as 58% of American households own stocks, either directly or indirectly, and crypto isn’t quite there yet in terms of the numbers, though it is growing at quite a rate and some experts think it could catch up to stock ownership in the future.
Crypto almost doubled in popularity between 2020 and 2022 according to some studies, and at that growth rate, we could see it catch up pretty rapidly, though people hold crypto for a variety of reasons including decentralized payments, anonymity, and security, while stocks tend to be held to try and make dividends and hope their value grows in the future.
Conclusion
Cryptocurrency can be considered a modern alternative to stocks in the investing world, but the main difference comes from the fact that cryptocurrency is designed to be used, whether that means paying for a meal or depositing into a gambling account. Stocks can’t directly be used to pay at a restaurant!