Those who are in the investment world may already be familiar with cryptocurrency investing. The existence of crypto or digital currency provides another option for everyone who wants to invest in a different way. Like currencies in general, cryptocurrencies can be used as a means of payment. However, it can only be done virtually. As the name suggests, this digital currency is not used as a physical payment instrument because it can only be used in the digital world. You can learn more on dan hollings the plan.
Are cryptocurrencies safe? As a virtual currency, crypto trading is an investment method that can be used as a means of payment on the internet. In crypto, there are complex cryptographically guaranteed passwords that will protect and maintain the security of this digital currency. If you are interested in using crypto as a means of payment, you can’t just use it. Before making a payment, first, make sure the seller or merchant where you shop accepts digital currency payments. So, you can’t just choose crypto even though this digital currency is designed for digital payments. The term cryptocurrency investment is a combination of two words, namely cryptography which means secret code, and currency which means currency.
What is the difference between investing in stocks and cryptocurrencies? Here are 10 differences between the two.
The type of instrument traded in the stock market is company shares. Meanwhile, the investment instrument used in the crypto market is a digital currency, such as Bitcoin.
- Asset Type
When you buy shares of a company through the stock exchange, the shares you own represent a percentage of your ownership of the company. Whether or not the company’s performance will determine the value of the stock. Meanwhile, cryptocurrencies do not necessarily represent partial ownership of the company or project that issued them.
- Aspects of Fundamental Analysis
Stock fundamental analysis involves various data that have an impact on the price or value of a stock, ranging from cash flow, return of assets or indicators that measure the company’s ability to use assets to create profits, to also gearing ratios to measure the extent to which the company finances its operations with capital. loan. Meanwhile, in crypto, the aspects that are considered are the basis for the use of the crypto asset, how many people use it, and the team behind the creation of the asset.
- Volatility and Risk Level
Stocks have a volatility limiting mechanism when the market is out of control through up and down auto rejection to trading in the form of a temporary suspension of trading which makes this volatility more manageable if there is a drastic decrease or increase. In a way, the stock market can tend to be more stable and lower risk. Meanwhile, crypto-assets do not have volatility control so that they can move according to supply and demand which makes the risk of crypto assets can go up or down drastically. It is this high yield that makes crypto so risky.
- Trading Platform Character
In stock investments, traders can make transactions by becoming customers in securities. Meanwhile, crypto-asset transactions can be carried out by traders or holders via crypto exchanges to crypto storage in the wallet application.
Stock investment is usually limited to the stock exchange in one country, such as the rule that foreign traders who want to buy shares in country A must adjust the rules in that country by creating securities account in the country. Meanwhile, crypto assets have unlimited connections between countries so the number of traders who can make transactions is also more.