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Crypto V/s Stock Market: Understand the basic differences

22 Dec 2021 By : yogesh
Crypto V/s Stock Market: Understand the basic differences

Crypto Vs Stock Market

We live in an era where everything is somehow digitally-connected, from shopping to filing complaints, we can do it from our smartphones. The technological change brought up various investment opportunities to earn maximum returns. In recent technology called blockchain has a cryptocurrency and NFTs are giving attractive returns to investors and project team members.

Improvement in technology does not only ease the operations of these markets but also emerging new markets. Blockchain technology is one the most recent and popular examples of investment technology.

Shares of the company are backed by the company's financial status, operations, and trustable products and services provided by the company's investors who build their trust in a particular company by analyzing its financial statements. Likewise, we can diagnose one specific cryptocurrency by assessing the project's aim, the team responsible for the project, social media influence on that crypto, assessing the whitepaper, and finding out whether the team behind the project is solving any problem. 

Although there is no clear base for comparing the cryptocurrency and stock markets because they are both conceptually different, they have their advantages and disadvantages and analysis criteria.

The purpose of the comparison is to get maximum returns with minimum entry and exit load. We can compare these two markets following criteria:-

Governance -

In terms of securities, the stock market is more likely to be secured as they are controlled by regulators across jurisdictions. Also, the taxation policy, when we talk about the stock market, is a clearly defined system, both in terms of long-term and short-term investments.

However, Crypto is a relatively new technology. Even the government is still in the process of understanding the technology. There are many dimensions to Crypto that have changed the paradigm of the Financial world and are giving a hard time to the regulators world over in designing a robust framework for regulating Crypto transactions.

Total speculation - 

Trading cryptocurrency is fully speculative in nature as they are not backed by any asset and cash flow. The only thing that is giving a return is increasing or decreasing the prices of crypto. While the share price of a company is backed by many financial aspects like profits/losses, cash flows, auditing reports, and company turnover. 

Fraudulent activities - 

In the case of cryptocurrency, investors invest in a project that seems good to them, and the only person they trust is the project's team members. Even this definition of a project finds a serious challenge in the case of Meme Coins.

If they deceive investors, there is no way of getting back the money they have lost due to the lack of government control. However, theft or cheating of any currency is not possible due to blockchain security. Theft can only be done from a third-party wallet, etc.

But in the case of the Stock market, there are serious regulations, that are already in place, that work towards investor protection. These regulations ensure that there are no fraudulent activities and that the investors are not cheated by any means.

Source of returns- 

When we talk about cryptocurrency, getting a return is only when someone buys your currency more than you have paid for that.

While in the case of the stock market, there are many options to get returns like in shares, you get the dividend, in bonds, and debentures, investors get a fixed rate of interest and many more. Buying at less and selling more is the most conventional and popular way of gaining returns. Also, people rely on the future projection of the price of the underlying security and invest in derivatives.

Centralization or decentralization - 

The cryptocurrency is based on blockchain technology that works on a decentralized approach, which means the authority of controlling and decision-making is distributed to a centralized individual, entity, or group. Although it doesn’t mean that it is 100%decentralized, some authority rests with cryptocurrency exchanges. 

But in the case of the share market, the securities issued by any company derive their value on the basis of the amount invested in the company and the profitability of the company. Hence, the valuation of the security is more or less centralized.

Time horizon - 

Timing is the most important element in investing, whether it is stock or crypto. Cryptocurrency is much safer when invested for the long term due to its high volatility in nature. Cryptocurrency is for those traders who can leave their money for some time to recover the market.

In both the Stock market and Crypto market, the winners are those who can hold on to their positions for a longer period of time in case of a downfall in the market.

Portfolio Management - 

investors can divide their whole amount of investment between bonds, debentures, deposits, shares, or government securities according to their risk preferences. Also, professional portfolio maintenance services are offered as a product in the stock market.

Crypto is a relatively nascent market. Investors should employ only a small part of the amount for this market. The crypto market is so volatile that it can bring huge profits or even complete losses.


Although Crypto is a relatively new stream of Financial assets, it is maturing as more and more investors are putting their hands on it. Looking into the same, it is not long before the CryptoMarket becomes a perfectly competitive market driven by a fair amount of demand and supply, with lesser manipulations possible.

It may take a while before Crypto gains the same stature and confidence as the stock market but till such time Crypto is a wild Horse running in the jungle. Those who get the pulse of it are more likely to gain big time from it. Reliable information will be of utmost importance in such a volatile and rapidly changing market. is one such platform providing relatable and trustworthy information in order to equip the investors with the right set of information to be able to take a wise call.

 Also, Crypto is evolving into many dimensions. It is not just an asset market but may take many new dimensions in the times to come because of the rapid evolution of technology. It may just be loud thinking but we may see a future where Crypto surpasses the Stock Market by a huge margin.

By analyzing these criteria investors can be brought themselves up to a conclusion about where they want to invest their money after assessing their level of risk-bearing capacity.