Stocks vs Crypto: Which Is Better?

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According to recent stats, roughly 1 in 10 people in the US invest in cryptocurrency, 65% of which jumped into the asset class only last year. 

Crypto is fast becoming the go-to investment, especially for the young and fintech savvy. But how does it compare to traditional stocks?


If you’re looking to invest your money, it’s essential that you understand the differences between stocks vs. crypto. Once you do, you can decide how to invest your money. Of course, everyone’s financial goals and needs are different, so it’s imperative to be well-read. By becoming wise to the differences between these asset classes, you can avoid following blanket advice such as “Stocks are better!” or “Cryptos are going to the moon!”


To get clued up on stock vs. crypto, keep reading and find out some of the main differences and similarities and how to decide which is the better investment for you. 


One of the first things to consider when comparing stocks vs. crypto is volatility. Overall, the cryptocurrency market is far more volatile than the stock market. Of course, some relatively stable cryptos and some somewhat volatile stocks exist—however, the crypto markets experience exponentially higher volatility levels than stocks. 

As digital currencies are still very young, this volatility will likely continue until the market becomes more established and mature. 

Pros And Cons Of Volatilty

stocks vs crypto, pros and cons

It’s important to note that market volatility can be good and bad, depending on your objectives. Traders often look for volatile markets because of high profits and short-term returns. But, the most money can be lost in these markets just as quickly.


Volatile markets are inherently high-risk, high-reward environments. As a result, they are more speculative and less predictable. Because of this, you should never invest money you can’t afford to lose in a high-volatility market. 


For instance, just because JP Morgan predicts Bitcoin’s price will reach 146K doesn’t mean it will achieve these levels within the forecasted timeframe. Depending on the market, Bitcoin could shoot past that level far sooner than expected or take another few years to get there. 

In the meantime, it might also dip. For example, suppose you invested money into Bitcoin that you must get out by a specific date. In that case, this is risky, as you have no guarantee it will be worth it when you have to sell. 


On the other hand, top-performing traditional stocks like Apple or Amazon can provide more security. In addition, you will benefit from the certainty that they’ll be worth closer to what you paid for them if you need to sell at a given point. At the same time, lower volatility also leaves less room for growth. Of course, there is always a chance that a stock like Apple will rise considerably over time. Still, there isn’t as much scope for appreciation as with a new and volatile asset class because the stock is relatively mature.


Another thing to think about when comparing stocks vs. crypto is liquidity. Because the stock market is far more significant than the crypto market, it has vastly more liquidity. 

In basic terms, this means that more buyers and sellers are operating at any given point. With cryptocurrencies, the liquidity is far less. However, this isn’t a big concern for significant cryptos like Bitcoin and Ethereum. These cryptos have the most oversized market caps, and liquidity isn’t an issue.

However, this is worth considering when trading smaller cryptocurrencies with lower market caps. For example, suppose you want to speculate on smaller, newer crypto projects. In that case, it’s essential to know that you might end up in a position where you want to sell your position, but there isn’t a buyer. 

These trades are more speculative than investing in significant cryptocurrencies like Bitcoin or Ethereum. Therefore they come with heightened risk and more vulnerability to liquidity issues. 

Market Maturity

Suppose you’re trying to decide between investing in crypto vs. stocks. In that case, it’s also worth considering the maturity of these two markets. 


It’s pretty safe to say that the stock market is a well-matured space. You can invest in potentially up-and-coming stocks in newer companies. Still, overall the stock market is dominated by established companies. For instance, some of the oldest companies on the stock market, like Palmolive, date back to the early 1800s. Although these companies are highly mature, their stock prices are relatively stable. However, this also means they might have little room for growth. In most cases, older companies have reached a level of market saturation. Therefore, they would have to do something revolutionary to expand their market share. 


In contrast, the crypto markets are very young. Because of this, they have a lot more uncertainty and more potential for growth. For instance, if the predictions that Ethereum and other cryptos will replace Visa and Mastercard play out—this will spell massive growth and adoption rates for digital currencies. As a result, if you are an early investor, you could achieve significant gains that might be hard to accomplish with many stocks. 


Whether this comes to pass or not, there is no doubt that cryptocurrencies are still a very young market with lots of scope for growth. The daddy of all cryptos, Bitcoin, is only 13 years old. Apple, arguably the daddy of tech companies, is 45 years old. If you had bought Apple stocks in their thirteenth year, you would have made a staggering return on your investment


While nobody holds a crystal ball, it’s not crazy at this point to predict that Bitcoin will reach Apple’s level of growth. But, of course, this is considering it’s already holding the 10th position in the world’s market caps. 


stocks vs crypto, cryptocurrency adoption, crypto adoption

Adoption is another critical area to consider in the investing stocks vs. crypto debate. 

Adoption includes many other elements, such as volatility, risk, and growth potential. 

Simply put, the less adoption there is in a market, the more risky the market is. In the case of stocks vs. crypto, stock market investing is much more widely accepted than crypto investing. At the same time, lower adoption means greater risk but also leaves more room for greater reward. Become what’s known as an early crypto adopter or early investor. Then, there might be more scope for your investment to appreciate. 


An excellent way to look at “adoption” rates of stocks vs. crypto is to compare institutional buy-in. Currently, institutional investors hold $70 billion worth of Bitcoin. This is roughly 7.85% of its supply. The buy-in from institutional investors has been strong and sudden. However, institutional crypto adoption must still catch up to institutional stock trading. It’s estimated that institutional trading makes up 70% of the stock market’s volume. 


There is still a long way to go as far as institutional adoption. Although this means the market is less established, it could also bode well for future price levels. Institutional buy-in is usually relatively slow. Because it often lags behind a little, giving private investors a valuable “early-bird” opportunity. If corporate investing rises even further (which is pretty likely in the case of cryptos like Bitcoin), this can trigger further price increases. 

Real-World Value

If you’re wondering which to invest in, stocks vs. crypto, another criterion is real-world value. 

Real-world value is a great way to evaluate a company or project you want to invest in. For instance, if you believe that Uber is solving a vital need and doing an excellent job, picking up some Uber stocks might be good. Many private investors who don’t do things like technical analysis invest like this. Instead of investing in companies they don’t know much about, they buy stocks of companies they use, such as Uber, Amazon, Netflix, etc. This way, they can keep an eye on the company’s service, and should they feel that the service isn’t as competitive as it used to be, they can use this insight to make a sell decision. 


The real-world value of stocks depends entirely on individual stocks and their companies. So, naturally, some listed companies have more real-world value than others. However, almost all legitimate companies have some real-world value and serve a need or gap in the market. Otherwise, it would be impossible for them to turn a profit. 

On the other hand, the real-world value of cryptos is often a hotly debated topic. 


Crypto haters often say that “cryptocurrencies aren’t real” and that they “have no real-world value.” However, this can’t be true, given that cryptocurrencies serve various needs.


Rather than having no tangible value, many cryptocurrencies have multiple value types. 

For instance, a cryptocurrency is both a token and its tech. You are investing in the tech and its potential by buying the token. However, you’re also getting a currency you can transact with globally in just a fraction of the time for a fraction of the cost of traditional international money transfers. 


Some cryptocurrencies have capabilities beyond being a currency. For instance, Ethereum’s smart contract functionality allows app building on its blockchain. Other crypto projects like Ark allow for blockchain interoperability, which is of massive value. In addition, blockchain tech is being utilized in logistics, supply chains, data sharing, digital voting, food safety, and more. Interoperability will allow different blockchains that exist in siloed isolation to connect. 


Besides these functions, cryptocurrency also has the real-world value of enabling fast, cheap money transfers and payments between people worldwide. It is also far less energy-hungry than the traditional banking system. Bitcoin came under much fire for its energy consumption, but it turns out it is far lower than the world’s banking systems and gold mining sectors. 

Inflation Hedge

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Suppose you’re busy deciding whether to put your money into crypto vs. stock trading. In that case, it’s also essential to factor in inflation. Inflation is rising, and Bitcoin is fast becoming a go-to hedge


Bitcoin offers solutions as fiat money devalues. To further explain, cryptocurrencies and Bitcoin automatically increase in value because all cryptocurrencies have a finite supply.

Fiat currencies like the dollar aren’t finite because the organizations like the Fed can regularly print more money into circulation, thus diluting the currency’s value. 


These long-term inflation hedging considerations aren’t as critical when comparing day trading crypto vs. stocks. However, crypto can be a valuable hedge against escalating inflation levels if you want to invest long-term.  

How Decide Between Stocks Vs Crypto

Are you still wondering which is better, stocks vs. crypto? The answer will depend on you, your unique needs, and your investment goals. 


Overall, cryptocurrencies offer a unique investment opportunity. Not only do they have tangible real-world value, but they are also a young market with much scope for growth. In addition, they can also be a solid hedge against inflation.


However, suppose you’re deciding between investing in crypto vs. stocks. In that case, it’s also important to remember that the crypto markets are still far more volatile and therefore come with higher risk levels. Therefore, never invest money you’ll need immediately; otherwise, you might have to sell at a loss. Instead, consider your timeline, and don’t make emotion-based, desperate decisions. Also, ensure you invest in crypto tokens and projects you believe in and have a solid community behind them. 


Suppose you are investing in stocks; the same holds. Always select stocks you believe in and have a solid company behind them. 

Looking For An Easy Way To Buy Crypto?

byte federal bitcoin atm crypto vs stocks, stocks vs crypto

Now that you have read this guide on stocks vs. crypto, are you interested in buying some BTC, ETH, or another crypto? If so, one of the easiest ways is through a Bitcoin ATM.


Byte Federal has secure Bitcoin ATM locations all over the country. In addition, we add new offerings and tokens all the time, including trading signals, gold, gift cards, and more.


To visit a Byte Federal ATM near you, visit our location finder page

What Is A Bitcoin ATM? How Does It Work?

Should I Invest In Cryptocurrency?

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Jennifer Lawrence, the effervescent Creative Director of New Bytes, brings a fresh and innovative perspective to the crypto-focused publication. Hailing from the vibrant city of Austin, Texas, Jenny's intrigue in the intersection of design, technology, and finance was sparked during her time studying at the Rhode Island School of Design (RISD).

Jenny's commitment to clarity through design, her comprehensive understanding of the crypto universe, and her passion for making information aesthetically accessible contribute immensely to Cryptosphere's appeal and its engagement with a broad audience.