Both stocks and cryptocurrency are important to any investment portfolio. Though they share certain similarities, they also play very different roles in a trader’s portfolio. The way they’re bought or sold in addition to the purpose they serve in an investment strategy could be a defining factor.
The very first step to starting trading stocks is to open a trading account with a trusted exchange. Here, you can buy, hold or sell your stock which carries out your trading decisions. The investor’s personal details such as an address, and social security number also have to be shared with the exchange platform. There’s a certain degree of safety and security when trading with a reliable register exchange.
Crypto investments are different in this matter. All purchases, sales, and trades can be done anonymously without revealing your identity to anyone. All crypto assets must be stored in a digital wallet or offline in digital storage devices like a USB or a hard drive. Even though anonymity is hailed as a key feature of crypto trading, an investor is entirely responsible for the security of their trades and assets. You have to keep and record your crypto’s movement. You can access them through a unique private key of 16 characters, the details of which must not be shared with anyone. Nonetheless, if hackers get hold of your crypto wallets, your entire investment could get wiped out without any chance of getting anything back.
There are plenty of financial exchanges around the world where stocks are traded regularly. Besides providing investors with a transparent and secure platform, they are designed to manage to trade large volumes regularly. These exchanges are generally well-regulated to protect the buyers in the market.
Like cryptocurrencies, crypto exchanges are also new. There are as many crypto exchanges as in the case of the stock market but there are still a good number of options. You could also come across options that facilitate easy conversion to fiat currencies.
Price fluctuations and sudden changes in the market mood are very common in stock exchanges. The cost of stock could go up or down due to many factors such as a new monetary policy or a change in the company dynamics. Often the reasons that govern these changes are either technical or have some economics behind them. On the other hand, cryptocurrencies are known for their volatility. It makes or breaks portfolios with dramatic price movements that take place in a matter of a few minutes.
The Great Depression of 1929 prompted the U.S authorities to create the Securities and Exchange Commission (SEC) to protect investors’ interests. The stock market remains a well-regulated financial zone not just in the U.S or in the UAE but all over the world. Because of these regulating authorities, it is mandatory for companies to disclose all information that can affect investors’ decisions.
The crypto world is decentralized and unregulated as there is no authority overseeing the transactions. However, different countries have different rules when it comes to crypto transactions and how they’re taxed. That said, no government body is directly involved in carrying out or supervising the trades that take place.