Bitcoin Vs. Stock Trading Explained

By Prashant Jha

If you are wondering if its better to invest in Bitcoins than buying stocks, we have already answered that question for you. Now, it is time to throw further light into the issue and have a look at the major factors that really set the Bitcoin trading scene apart from the traditional stock market. Today you will have Bitcoin vs stocks trading explained to you and we are sure it will be a help.

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Bitcoins and stocks are entirely different from one another and yet they are frequently compared because they are both traded as assets. Even though Bitcoin is a digital asset or currency designed to act as a store of value and medium of exchange, it is commonly equated with stocks because it is traded for profit, just like stocks are.

Despite this perceived similarity, there are many underlying differences between Bitcoin trading and stocks trading. Let us have a look at what they are.

1. 24*7 Trading

Crypto markets around the world see 24*7 trading that does not stop, given its for peer-to-peer virtual assets that can be bought and sold by anyone, anytime across the world.

On the contrary, the stock market has definite time frames within which the trading takes place, and very rarely does it happen 24*7.

2. Level of Regulation

Given that the stock trading space is far more established and much older than the crypto trading scene, it has a very clearly spelt out and standardised set of rules and regulations. All of these make sure that the level of scams remain low in this kind of trading.

On the other hand, the world of Bitcoin trading is yet to have a comprehensive, uniformly applied or standardised set it regulations around the world. This makes this trading scene quite prone to scams, hacks and security breaches.

3. Underlying Value

Stocks are backed by the revenue generating capacity of actual companies. On the other hand, a cryptocurrency like Bitcoin has no underlying asset to back it up.

Therefore, its value is prone to a much higher degree of volatility, a point we will come to in the next section itself.

4. Volatility

The crypto market is characterized by a much higher degree of volatility than the ordinary stock trading market.

The prices are subject to a whole host of market pressures and since there is no underlying asset backing, the prices move around more easily than stock prices.

5. Price Consistency Across Exchanges

In case of crypto exchanges, owing to a lack of clear market regulations, the exchanges are not inclined to improve prices.

As a result, there may be some inconsistencies in crypto prices across cryptocurrency exchanges. This phenomenon is rarely, if ever, observed in the traditional stock market setting.

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Prashant Jha

As a content writer Prashant believes in presenting complex topics in simple laymen terms. He is a tech enthusiast and an avid reader.

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