Crypto Trading Vs Stocks
The new or the old? The cryptocurrency market or the stock market?
A tough question – or maybe not when you take a closer look.
Crypto trading is new and it is still figuring itself out, that much is true. But despite being new age, crypto trading already shows some advantages over stocks that may encourage you to choose cryptos.
Firstly, there is the simple matter of time – crypto trading is a 24 hour market, something stocks cannot boast.
Your schedule may not allow for you to dedicate time during the day to trade. That is a fact for many people, and crypto trading will give you flexibility.
Commissions are also a difference between these two markets.
The way traditional forex brokers profit from your trading is through something called the spread. Crypto only brokers currently employ a structure of fees which are outlined on their sites.
This allows you to easily enter trades without having to worry too much about the charges per trade – they are minimal.
This is further maintained because there are no middlemen. Any middleman results in further charges and fees, but this is a non-issue for us.
Ties to regulation are lesser in the crypto trading landscape.
Let’s be clear, the crypto world would benefit from further regulations on the international level as there is a level of protection provided by regulation.
However, often you will see that too much regulation will actually hinder your progress quite a lot. This is one of the issues with stocks.
Overall, we definitely benefit from less stringent regulations on trading. That’s why, at the moment, we prefer the cryptocurrency market!
Crypto Trading Vs. Forex
The Forex market is the most similar to the Crypto market when it comes to trading.
The spreads are slightly higher with Cryptos, but that is to be expected in such early days. Brokers are taking a lot of inspiration from the Forex market in how they handle and treat Crypto trading which is great news!
It is easy to start trading in the Forex market and anyone can do it with pretty much any amount of money.
This will encourage a lot of people in the future to trade cryptocurrencies because it doesn’t require you to dedicate your work life to it.
Price sensitivity is another characteristic that can affect markets.
Trade activity and its effects on price are extremely important.
If you were to carry out a large share purchase on a small company in the stock market, the impact would be immediate and volatile. This provides a platform in which a small group can have a large and unfair impact.
The Forex market is immune to such things and Crypto trading is the same – albeit not as immune as Forex.
This allows for a bit of stability which we like! We are small individual traders that don’t have access to a billion dollar fund. The playing field is level in terms of potential impact to price, and this enables us to trade Cryptos in a more confident manner!
In the past, most cryptocurrencies have one direction they go – up. This doesn’t provide as many opportunities to trade.
Fortunately, following the highs of many coins in December 2017 we have seen the cryptocurrency market in a new light.
This chart of Bitcoin shows the potential profit to be made from trading. It is volatile, reactive and therefore tradeable.
Trading cryptocurrencies may very well come in “seasons”. Strong periods of increase in value, followed by plateaus of linear movement.
This potential is great news – a mixture of investing and trading will create a dynamic trading climate for cryptocurrencies.
What to Choose?
There are multiple paths for us all to take when you look into cryptos.
Trading and investing with them is by far the safest and most profitable way of becoming financially involved.
We are witnessing the rise of a new corner of the market that is showing signs of volatility and extreme growth – it is possible to take advantage of this in a safe and controlled manner!
Being patient and investing some time into preparing your trading skills will see you net some great profit as well as learning about this incredible technology along the way!
If you are interested in pursuing some trading or investing with cryptocurrencies, head on over to our last stage where we will run through some of the basics of trading.
After that, you can start to learn how exactly you trade!