Back in the day, investing in public companies was as hard as going to mars. Basically, it was like this, you had to find a trusted financial advisor, give them a call to set up an account, and call them if you wanted to buy or sell a specific stock. But nowadays, buying a public company's stock on the New York Stock Exchange is as easy as 1,2,3. As long as you meet the minimum requirements, you can invest from your mobile from anywhere around the world.
In the last decade alone, the investing space has evolved a lot. There is a stock market, cryptocurrency market, NFTs, Metaverse, and more investment opportunities. This article will focus on whether we should invest in the stock market or cryptocurrency.
To those who do not know the difference between a stock and a cryptocurrency, the stock is the ownership of a particular business backed by the companies' assets and cash flow and follows the country's regulation. On the other hand, cryptocurrency is a decentralized digital currency, and the government has no control over it.
Now that we know the difference between cryptocurrency and shares of a company, where should you invest your hard-earned money? It is tough to tell you exactly what to invest in because people have different risk tolerance.
Advantage of investing in the Stock Market
Low Risky: The Stock market is known for not being risky for investors. You can only lose your money if the country or government is overthrown. For instance, if you invest in the S&P 500, you invest in the top 500 companies in the United States. If a company drops under the minimum requirements, it gets dropped and brings up the next line company that meets the requirements.
You get a chance to invest in a company regulated by the government. In other words, your investment is safe. Public listed companies cannot do whatever they want. After all, the government regulates them.
The disadvantage of investing in the Stock Market
Risky: The government has control over your money. They can freeze them whenever they are pleased to do it.
Low Rewards: The reward is too small because the lower the risk, the less the reward
Advantage of Investing in the Cryptocurrency market
Privacy: If you own your coins/tokens on the crypto wallet, nobody can ever know that you own them. That information is not available to anyone. The cryptocurrency ecosystem is very protective because even the government cannot see that you own those assets until you sell and transfer them to your bank.
Cannot lose your tokens: For those in the third world continents like Africa, South America, and Asia, the government, When the government collapse, people are more likely to lose their money in the banks. However, if you own Bitcoin or any other digital currency, you will have all your money even if you move to another country. For example, we all know about Afghanistan and the Taliban. Many people lost their money when the government fled the country because a new regime came to power. However, those who own digital currencies could get their money since Cryptocurrencies are decentralized. One Bitcoin in the USA is equal to One Bitcoin in Afghanistan.
The disadvantage of Investing in the Cryptocurrency market
Very Risky: The crypto market is volatile. Day Traders and Swing traders can lose a lot of money in less than a day because the crypto market has a lot of swing moods. 10% drop or upward is entirely nothing in this Crypto market.
No regulation: In case of a hack or other kind of event where people can steal tokens from the exchange or crypto wallet, there is a chance that crypto exchanges might not be able to pay back what was stolen. No law can force them to pay. This is where less regulation can be a bad idea.
Whether you Should Invest in the Stock or crypto market depends on many factors. If you are young and risk-tolerant, I will say crypto is the way. After all, it can become the next big thing. The S&P 500 is the way to go if you are old because it is less risky is backed by the US government.
Disclaimer: I am not a financial advisor. Everything I say or write cannot be used as financial advice. They are for education and entertainment purposes only. Make sure you do your own research and due diligence before investing your hard-earned money.
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