Let’s Compare: Trading Crypto vs Shares

Is crypto better? Or do you prefer investing in stocks? Perhaps you want to dabble into both? 

Diehard crypto followers will argue that crypto is not just good for investing but is the future of finance. They will give the example of how a $1000 investment turned into a million bucks over a few years. Conservative and traditional investors will prefer parking their money in stocks. 

They will talk about the power of compounding and patient wealth-building. If you are wondering which way to go or how much to allocate to cryptos vs stocks, then it may help to first understand some key differences between stocks and cryptocurrencies. 

Once you have that understanding, you can then figure out how your psychology and financial goals match up with both asset classes.

The Concept of Stocks vs Crypto

Cryptocurrencies differ from stocks in many fundamental ways. Firstly, stocks are a long-established asset class whereas cryptocurrencies have burst onto the scene only during the last few years. They both are intrinsically different. 

Stocks offer part ownership of a business. This part-ownership means that the stockholder also enjoys a share in the company’s profits in the form of a dividend payout. Cryptocurrencies were designed to serve as a medium of exchange and, in some cases, a store of value. But they usually do not have any intrinsic value. 

Cryptocurrencies are powered by blockchain networks that use cryptographic technology to verify transactions. One can earn passive income from cryptocurrencies by lending them out.

Stocks are also stored in a different way than cryptocurrencies. Stocks are stored in an official designated account. Cryptocurrencies are stored in digital wallets that are usually accessed via a digital key. There are some concerns about the security of cryptocurrencies and how safe they are from hackers. But, at the same time, hackers have also targeted financial institutions in the past. The good news is that with Cerus Markets, you don’t need a wallet to trade, and hence, you don’t have to stress out about your wallet getting hacked.

Publicly listed companies are subject to elaborate regulations. They have high disclosure requirements and have to report information regularly. Cryptocurrencies don’t quite have the same level of disclosure requirements.

The Volatility

One of the biggest differences between stocks and cryptocurrencies is the behaviour of their respective prices. Cryptocurrencies tend to be a lot more volatile than stocks. Think about the times when prices moved wildly due to a celebrity endorsement, a government crackdown, an SEC order, or news of a hacking event. 

Cryptocurrencies tend to be very sensitive to news and events. There are far more black swan-like events in the crypto space than in the stock markets. There is a saying that a one-month candle in the stock market is like a one-week candle in the crypto market. If stocks have 3 or 4 major trend changes in a year, then cryptocurrencies will likely experience 3 or 4 major trend changes in a much shorter time frame.

Stocks can also be volatile. Important news and events can also affect their prices. A financial crisis or a scandal can also lead to price crashes. But, in general, the frequency of such events and price movements is lesser in stocks as compared to cryptocurrencies.

How They Are Traded

Stocks are traded via regulated stock exchanges. Some famous names of stock exchanges are the New York Stock Exchange and the Nasdaq Exchange. These exchanges operate at a specific time on specific days of the week. 

Cryptocurrencies are bought and sold on digital exchanges that run 24X7. Multiple crypto exchanges are regulated by national governments. However, there are unregulated exchanges as well. So, one needs to do some research and due diligence on an exchange before deciding to trade.


Cryptocurrencies are borderless. They can be exchanged with anyone who has an internet connection. It may not be as easy to transfer stocks of Apple to someone in another country. The level of accessibility is higher with cryptocurrencies. Opening an account to start trading or investing is pretty simple. 

Cryptocurrencies are also not controlled by any central bank or financial institutions. One of its key value propositions is the fact that it is decentralized and isn’t as heavily influenced by central bank policies unless the central bank decides to completely ban a cryptocurrency. So, factors like inflation and the printing of currency are less influential on cryptocurrencies than they may be on stocks or bonds.

However, cryptocurrencies are accessed using a digital key and seed phrases. If one forgets these keys or phrases, then they may not be able to access their crypto assets. With stocks, there are ways and means to access even if one forgets their broker id and password.

So, Which One is Better?

Ultimately, the goal of every investor is to make money. Factors like risk-taking ability, the ability to emotionally handle price movements, the comfort level with security features of digital wallets, and the overall mechanics of executing a trade will point you towards either stocks, crypto, or both!

If you think you can handle the ups and downs of cryptocurrency markets then you might find plenty of opportunities to invest or trade in cryptocurrencies. If you want to participate in a growing new asset class but aren’t too comfortable with the way cryptocurrencies work, then try allocating a portion of your portfolio to it.

Crypto as a Strategic Allocation

Cryptocurrencies can potentially deliver very high returns with high volatility. Some investors tend to allocate a certain portion of their portfolio to cryptocurrencies. They view cryptocurrencies as an alternate asset class different from stocks, bonds, and real estate. The idea for those investors is to diversify their portfolio by making a strategic allocation to cryptocurrencies. 

This allocation isn’t too small that it does not make a difference to the portfolio’s return but also not too large that its high volatility affects the portfolio’s overall risk-return metrics.

If you believe that you are ready to start investing in cryptocurrencies, then take advantage of Cerus Market’s platform. It offers market-beating features, security, indicators, analysis tools, and everything that you need to get started. Additionally, you can also take advantage of our 100% welcome bonus offer, currently valid for new sign-ups. 

As an ongoing reminder, don’t forget that there is always a bull market somewhere – With the ability to trade in both directions, you can always profit at Cerus Markets.

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