How different Cryptocurrency to Stocks?

Benjamin Franklin quoted that an investment with knowledge pays the best interest as return. Making proper investment is nothing but more than the traditional saving. There are many ways in doing investments. 

Investing the money for Bank Fixed Deposits and buying saving certificates from post-offices are traditional investment strategy that many people used to follow. After that investment strategy slightly changed and people are investing on land and buying gold as investment for long term that pays off maximum returns in long-run.

After staring globalization, inviting FDIs into insurance sector, investment strategies have drastically changed in India. People are start investing in stock exchanges directly. Online trading is common and regular investment strategy for an employee. Private insurance companies offer Unit Linked Insurance Policies to the people and they showed interest in taking ULIPs. Many people used to learn financial glossary to invest in stock exchanges. IPOs turned to be huge success after 2005 in India. Anil Ambani’s Reliance Power IPO in biggest debacle in Indian Stock market. This proves that big names are no guarantee of big returns, nor the fundamental stock logic that infrastructure is always a safe bet. The issue was sold out within the first minute of its opening on January 15, 2008, a record for a mega offering of 11,563 crore. The IPO had received a record over 50 lakh bids worth  7.5 lakh crore, and the issue got subscribed by more than 72 times. Many people have applied for personal loans to apply Reliance Power IPO.

Indian market crashed in 2008 in the months of January, May and June followed by Satyam collapse made people to ground. Investing in digital currency becomes news trend in 21^st Century. There is huge difference in investing digital currency now and 10 years back. The average person spends nearly 9 hours a day on electronic devices and the transition to digital currency is inevitable at this point. Growing demand for cryptocurrencies is increasing on each passing year. As of January 2021, there are more than 4K cryptocurrencies in circulation. This article is about to get to know the key differences between Digital Currency market and Equity market. Before discussing on differences between two, there are few similarities exist for two. Volatility and risk are common features for both digital and equity markets.

·        Stocks are backed by legitimate companies that are expected to turn a profit. Companies have their own physical assets as part of their valuation. Cryptocurrencies haven’t backed any biggies and their valuation based on hype and their functionality.

·        Initial Public Offering (IPO) is common for companies to enter into primary market where Initial Coin Offering (ICO) for digital currency.

·       Equity is for fund raising for companies but cryptocurrencies are meant for different purposes like games and programming in addition to fund rising.

·        Crypto is nothing rather than computer code whereas equity is more about paperwork.

·        Though volatility is common for both but with slight difference. Crypro market is most unpredictable, we can guess some reasons on sudden stock market crushes.

·        Cryptocurrencies are very prone to fraud due to its decentralized and unregulated feature. Stocks are heavily regulated aiming to protect investors.

·        Buying shares or stocks means you have certain amount of value have in your Demat account whereas buying crypto means owing some amount of money in the form of digital currency.

·        The Crypto market runs 24/7, 365 days a year but stock exchanges can work for 5 day week with prescribed timings and holidays.