The stock market is seen by most people as an adult counterpart to the crypto market. While the crypto market is still relatively unregulated and growing with projects that have swindling intentions, the stock market is comparatively harmless and serious. Due to the much higher volume and much more advanced pricing, price volatility in the stock market is much lower. Strong regulation of this market also allows fraudulent companies to keep away or severely narrow.
Nevertheless, the crypto market offers some innovations from which the stock market can still learn. Below we will highlight some of these aspects.
1. Trading is always possible
Those who are used to the rapid pace of crypto trading will only be able to yawn tiredly at the speed of the stock market. Because while Bitcoin and Crypto can always be traded: 24 hours a day, 7 days a week, whether holiday or not, the clocks on the stock market are running much slower.
If you want to trade in the stock market, you have to stick to the opening hours and these seem to be quite outdated in 2019. The trading of stocks on weekends or on the many local public holidays can be totally forgotten.
And even during the week the trade does not take place for 24 hours. For example, the New York Stock Exchange currently only offers trading hours from 9:30am–4pm.
2. You can trade with smaller amounts
Stocks can be only purchased completely. For example, if someone wants to buy a share of Warren Buffett’s Berkshire Hathaway A stock, it’s better to have $286,450, otherwise, it will not work. How about Google? Under USD 1,100 ,it is nothing. So you will make just ten USD.
For cryptocurrencies, this is easier. I want to buy bitcoin for three USD or for 30 cents? No problem. You simply get a fraction accordingly. Again, the stock market is quite dull.
To be fair, you also have to say that there are opportunities such as CFDs and ETFs and other financial instruments that make this possible indirectly, but you do not directly acquire the stock itself but another financial product.
3. Getting started is easier
You have to admit, of course, that you’re double-benching here because the stock market is much more regulated and it’s also true that you can register much faster and easier on the crypto market than on the stock market.
Between the idea “I would like to trade cryptos” and the possibility of actually dealing with cryptos is now only a matter of a few hours. The KYC verifications are now done relatively quickly.
Between the idea “I want to trade stocks” and the ability to actually trade stocks, usually take several days and lots of paperwork to complete.
4. Lower fees
Compared to most brokers, the exchanges in the crypto world are actually relatively cheap. For traditional equity brokers, you have to expect an average of at least $ 5 fee per trade . For Kraken, however, the trading fee for buyers is only 0.26% of the purchase price. A fee of $5 is only reached from a purchase value of> $1.900. For many retail investors, who tend to buy smaller amounts, the crypto purchase will be much cheaper than buying stock from a traditional provider.
But what could be the future of the two markets look like? It is not unlikely that the two markets will meet and merge in the medium term. The crypto market will see more regulation and greater liquidity and price stability with less manipulation, while the stock market is likely to eradicate some of the “drawbacks” listed here. In the course of digitization, tokenization of shares is conceivable. This would then soon buy a VW share as well as a Bitcoin in fraction and be traded around the clock. The first pioneers in this area are the so-called STOs, which consider themselves as traditionally regulated company shares, only on a token basis.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.
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Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
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