Crypto vs Stocks and Currencies

Large leader companies of the global markets have seen the cryptocurrency market with the eyes of competition since its birth. Marking some differences for the taste of traders and investors.

  • The forex market has higher volatility compared to crypto markets.
  • Cryptocurrencies continue to take center stage among digital markets in 2021.

The first investment and trading modalities in history began in the 1980s with international currencies exchange, spearheading high-value fiat currencies such as the US USD, the Euro (EUR), and the Japanese yen (CHF).

Then in the ’90s, a powerful trend developed towards the stock market of large companies such as Microsoft, Sony, and Bank of America among others. Also with investments in raw materials and stocks from financial exchanges such as New York.

But the 21st century gave way to a new perspective for the management of the economy and finances with the arrival of cryptocurrencies and digital markets for the exchange of assets for Fiat money or other cryptocurrencies.

Impact of cryptocurrencies on the new economy

The first impression that one had about cryptocurrencies was one of mistrust and uncertainty, given the possibility that Bitcoin was a bubble that could explode at any moment.

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After 12 years, millions of people globally trust Bitcoin and cryptocurrencies even more for all kinds of purposes such as exchanges, remittances, trade in goods and services, speculative trading, and even crypto mining.

Crypto assets have marked society in multiple ways. So much so that now cities like San Francisco, Vancouver, and companies like MasterCard and Starbucks have adopted the currency as a means of payment and it adopted as payroll for employees.

The stock and decision market

Stock markets are platforms or means of exchange of contracts. They can also define themselves as a set of “shares” represented by an organization and have an individual value, determined by the firm’s value on the stock exchanges. 

This modality works because it is based on the companies value take after making movements or making high-impact decisions for the market; then, this value determines the price of each share, according to the total number of contracts issued by the company.

The basis of its operation becomes, in turn, the only difficulty that this type of investment presents since companies must announce new products, campaigns, and services; and thus generate price increases.

The volatility of currencies and commodities

Foreign currency markets have been for many years one of the main forms of investment for companies, banks, and multinationals. Trading fiat currencies and raw materials such as gold and oil.

On the internet, there are various platforms through which it is possible to invest in these assets and start a trading career. The foreign exchange market, which when dealing with foreign currencies is understandable that commission costs are usually high.

Given that, political decisions and financial markets affect the GDP of the countries and therefore, the value of their currencies; the prices of these currencies are often highly volatile and unpredictable.

Volatility in crypto

The volatility of cryptocurrencies depends on the purchases and sales they generate on the Internet, so that high purchases contribute to their value, while massive sales tend to decrease it.

Added to this attribute is the fact that cryptocurrencies do not generate an interest rate as they are decentralized assets; exchange platforms charge a lower commission rate compared to forex markets.

This characteristic allows investors to take positions that can vary from the short term through medium volatility, to the medium and long term to generate a return that can be progressive over time.

Volatility in crypto

The volatility of cryptocurrencies depends on the purchases and sales they generate on the Internet, so that high purchases contribute to their value, while massive sales tend to decrease it.

Added to this attribute is the fact that cryptocurrencies do not generate an interest rate as they are decentralized assets; exchange platforms charge a lower commission rate compared to forex markets.

This characteristic allows investors to take positions that can vary from the short term through medium volatility, to the medium and long term to generate a return that can be progressive over time.

Long-term profitability

For most traders around the world, cryptocurrencies have become synonymous with a long-term investment opportunity, thanks to the scalability that they have presented in their prices over the years.

The scalability of Bitcoin is the best example to demonstrate the possibility of achieving long-term profitability, bearing in mind that 10 years ago the price of Bitcoin was around US $ 31 per unit.

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