One of the leading questions which arises in the minds of any investor in today’s world is what to choose between crypto and stocks. The historical returns provided by stock market and the meteoric rise of cryptocurrency in the last 5 years creates a dilemma of investing in crypto versus stocks.
Today in this article we hope to solve this conundrum for or readers as we differentiate between the 2 asset classes and help you in deciding what is best for your investment portfolio.
The concept of Stocks is known to exist more than 700 years back in 1250, as a milling company introduced 100 shares in the market with its price changing based on the profitability. While crypto is a rather recent phenomenon, first heard of in 1983 when David Chaum began minting digital currency called ecash.
Both stocks and cryptos have evolved over the time, however cryptos despite its popularity has not been accepted by most of the governments across the global due to its non-regulatory structure and its speculated use in the black market and terrorist activities.
We would now like to discuss on some of the major factors which one needs to consider before deciding on investing in stocks and cryptos.
Key Factors to Consider: Investing in Crypto Versus Stocks
Security and Trust factor: One of the key factors which differentiates stocks and cryptos is the matter of trust one has while investing in them.
In one hand stocks are regulated by government bodies and central bank of a country cryptos are unregulated in nature and often recommended not safe to invest in. Stocks have some underlying intrinsic value based on the net worth of the company while cryptos have 0 intrinsic value.
Profitability: Its true that cryptos have provided abnormal profits in a shorter duration of time as compared to stocks but the reason of its sudden surge in price is unpredictable, unanswered and hence raises questions over its use as a safe investable option.
Tax Laws: As of now in the USA tax rates are same for capital gains earned by selling cryptos and stocks
Financial Goals: One needs to consider his/her financial goals over the future to assess his/her risk appetite and financial needs to decide on how much it is safe to invest in risky assets like crypto and stocks.
So have you made your decision about investing in cryptos or stocks, we know it’s a difficult one and hence we have prepared this content to read this and make a decision considering all factors before choosing one or both to invest in.?
Another way to decide which one to choose could be looking into the pros and cons of investing in stocks and cryptos.
Hopefully through this article we were helpful in creating some meaningful insight into your mind.
Feel free to read this article again if you want to refresh your memories.
Till the next article we bid farewell and wish good luck in making your investment decisions.