Did you know that 16% of Americans report that they’ve at some point used or invested in cryptocurrency? The number is far higher when it comes to Americans who own stocks. Many people choose to do both.
For anyone who’s never invested a dime before, stocks and cryptocurrency might be confusing. What’s the difference between stocks vs cryptocurrency anyway? Should you invest in both?
We’re here to offer a quick explanation so you can make informed decisions about your investment. Keep reading to learn more.
What Are Stocks?
Many people who have been investing in “meme stocks” have forgotten what a stock actually is. When you own a stock, you own a small fraction of a business.
This obviously isn’t enough for you to be making major business decisions (although many businesses do open themselves up to opinions from shareholders), but you’re funding the business and you reap the benefits when the business succeeds.
Stocks go up and down based on the success (or projected success) of the company. Many “safe” stocks will experience dips when they have bad fiscal years or during times of economic distress (such as the early days of the COVID-19 pandemic).
Investing in stocks requires a lot of research unless you’re investing in a “safe” option. Otherwise, investing is more like gambling.
What Is Cryptocurrency?
Cryptocurrency is a completely different ball game. While many people treat crypto and stocks the same, they have fewer similarities than differences.
Like stocks, cryptocurrency is a gamble. There’s less research that you can do to determine whether or not a crypto coin is going to be reliable because the technology is newer.
Many people see the success of Bitcoin and want to get some skin in the game. In reality, crypto is far more volatile.
Cryptocurrency has no background in hard assets. Instead, its value is based on speculation. You’ll notice that popular “meme coins” will rise up in price overnight only to fall as soon as they get high enough for investors to sell everything and get out while they’re on top.
If you’re interested in investing in crypto, make sure that you take your time and don’t invest in anything before you know what you’re getting yourself into. Stable stocks, like Bitcoin and ETH, still aren’t “stable” per se. There’s always a risk.
While many speculators think that crypto is the future, it’s still up in the air. Invest with caution.
Stocks vs Cryptocurrency: Which Is Right for You?
Are you going to invest in the stock market or open up a crypto wallet? When you’re deciding between stocks vs cryptocurrency (or even if you choose both), make sure that you start by doing all of the necessary research. Remember, either way, this is no different from gambling.
Good luck with your investments!
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