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Crypto vs Stocks what to buy in 2021

Crypto vs Stocks what should I buy?

Stocks are a traditional way for people to generate wealth with their money, there are pros and cons to putting your money into stocks. Crypto on the other hand is very similar while also being very different from stocks. There are many reasons you would rather invest in crypto rather than stocks. Long story short crypto is often picked by people because of the volatility which allows for faster gains rather than what stocks can offer. There are also many other reasons why crypto is seen as the superior option between the two, so stick around and find out more.

Volatility

Cryptocurrencies are extremely volatile, this can make you rich or poor quickly so having a strategy is important. Some see it as a gamble which we have seen thanks to certain investing subreddits but others can apply a strategy and profit handsomely from the extreme price swings. While crypto can drop or rise by 50% in a day stocks do not show the same kind of volatility which makes them a drastically safer choice.

Finite

An awesome feature about cryptos is that there is a finite amount of them. For example, we will use Bitcoin, there is a finite amount of Bitcoin so at some point you will no longer be able to mine Bitcoin. Only 21 million Bitcoin will ever exist and once all have been mined you will no longer be able to mine Bitcoin, only purchase it from others. So as long as there is demand for Bitcoin it will only go up in price. Meanwhile, a company can always issue more stocks for their company, or a country can always print more of their money hence making all money in circulation worth less and less. This rule does not apply to all cryptos but it does apply to most.

Burning

Some cryptos on the other hand burn their coins on preset conditions automatically. This essentially makes their cryptos more and more scarce each time they are burned. Burning means that a fraction of all of the cryptos gets sent into a “dead” address. This crypto can never be unburned so it promotes people to hold onto the coin because there will be less and less of a certain coin in the future. Some coins that do this are Binance’s BNB and Bancor’s BNT. These coins help create a long-term investment opportunity because of the long-term scarcity of the currency.

Ethereum crypto dead address where cryptos on ETH network send their tokens to be burned.

Future

We do not like speculating but many things indicate that cryptocurrencies have a place in the future and that they are here to stay. Some cryptos are currently almost like start-ups and don’t essentially have a refined product yet this can be seen in all facets of cryptos like DEFIs (Decentralized Finance); DEXs (Decentralized Exchanges); NFTs (Non-Fungible Tokens); etc. These projects are all still evolving and improving with time. Some are building bridges with others, for example, there is a “Wrapped Bitcoin” on the Ethereum network which allows you to use Bitcoin on the Ethereum network. With time we will see large integrations with the blockchain and our world as we know it, like proving ownership of something through the blockchain, decentralized storage, decentralized supercomputers, etc. By investing in crypto you invest in the future while stocks often represent the company that already exists and often won’t evolve past what it currently is.

Decentralized

The great thing about crypto is that it is not governed by any government. This does mean that this currency can be abused but at the same time, it allows for good. It has similar properties to Tor if you think about it, while it was created by the United States government that’s beside the point. It was created for the US to have a secure way to use the internet when it matters most, for example in a hostile country where the internet is monitored. For them to be truly anonymous they had to give it to the public so that their traffic gets drowned out by the rest but this opened the gates to illegal websites on the dark web.

Crypto is similar in that sense, while there is the opportunity for evil there are also many implications for good which some countries are starting to notice and make it a legal currency in their countries. For example, El Salvador recently made Bitcoin legal tender. This makes this another great investment opportunity when considering that there is a great possibility of other countries accepting cryptos as legal tender. Just holding Bitcoin for example as a speculation investment can reward you rather well once the currency becomes legal tender, while stocks and Forex do not have the same kind of opportunity.

Blockchain

There are many benefits of blockchain not just for money per se. One example can be a blockchain of ownership of cars. You can have a permanent record of all car owners of all cars and there will no longer be disputes of who owns what. There are many other benefits when it comes to blockchain technology, once deployed it is very hard to alter so you can have trust in what the blockchain contains when it comes to the data in it. Thanks to blockchain tech it is easier to keep track of things because it’s all there out in the open and you can view it whenever you like and track what you want to track.

Staking

Crypto has staking which is a very interesting feature that came as early as 2012 but didn’t take off until recently. Now that we’re concerned with the power consumption that mining requires, suddenly proof of stake coins are starting to seem appealing. The way you make money with staking is by investing in crypto and putting it into a stake which often requires that you lock your funds for a set period, during that time you will be generating tokens based on how much you have locked, sometimes you will also be given voting power proportional to how much currency you have staked. Imagine buying a stock and instead of dividends you will be rewarded with more of the stock for holding it, that is a quick summary of how it works. If you wish to know more about staking check out Binance’s explanation of it.

So what do I buy?

At the end of the day, it is up to you what you buy. Stocks are drastically more stable than crypto but crypto can make you very rich in a short period. There is a lot more that goes into the whole equation that you have to figure out for yourself. Another factor to consider is your risk tolerance, crypto is risky but lucrative when done correctly. Never put in more than you’re willing to lose, never put all your eggs into one basket, good luck, and happy trading.


Disclaimer: The content of this webpage is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances.