The Entrepreneurs

Cryptocurrency Trading vs. Stock Trading

  • Written by News Company



The goal of any professional trader is to diversify his investments in order to spread the risk across a bigger number of asset classes. As new industries emerge, so do new trading instruments, which is why today we will talk about a few advantages and disadvantages of cryptocurrency trading as compared to stock trading.


Advantages of cryptocurrency trading

  1. Volatility – in order to generate profits in the markets, traders desperately need volatility. In comparison to stocks, cryptocurrencies are more volatile, considering that liquidity is very low. Just to give you an example, the global cryptocurrency market cap is around $140 billion at the time of writing. In contrast, the Apple market cap exceeds $900 billion. It’s also important to mention that volatility acts like a „double-edged sword” since it can amplify gains and losses as well.

  2. Innovation – the blockchain technology had really managed to disrupt several industries in the past few years, which makes analysts anticipate it will be the building block of a new technological revolution. Since all cryptocurrencies exist thanks to the blockchain technology, we could see them more integrated into the economy as time goes by.


Disadvantages of cryptocurrency trading

  1. Liquidity – since it’s not as old as the stock market, the cryptocurrency market could still be considered in its early phases. As a result, liquidity is much lower, which leads to higher spreads, as compared to other asset classes. Low liquidity can pose some difficulties when it comes to trade execution. Your broker might not fill your orders with high precision and it will be tough for you to get in or out of the market when volatility is very high.

  2. Limited knowledge – the market is new so people had not managed to accumulate enough data in order to understand what moves the market up and down. The same principle of demand and supply is valid for cryptocurrencies as with stocks, but all the reasons that could impact demand or supply are yet to be found. Because of that, it will be hard to appreciate whether a particular cryptocurrency is valuable or not.


To conclude, as with any other asset class, cryptocurrencies have strong and weak points, which is why traders should treat them with caution. Although brokers like AtecsCapital, forex.com, and others had included cryptocurrencies in their instruments lists, greater attention to risk management should be allocated since the market could suffer sudden changes which might have a strong impact on valuation as a whole.


.

Looking for a Change? Top Freelance Jobs…

Get up at 6:00 am. Arrive at the office by 8:30 and spend at least nine hours behind your desk. Go home and watch some TV before falling asleep, rinse...

4 kinds of work breaks you need to intro…

Did you know that 18% of Australians eat their lunch at their desk or workstation? Despite research showing that employees are more productive at work when they take breaks, many...

6 essential things your small business n…

As a small business owner, there is a lot that you need to think about, from how to maximise your small office space to how your business can cut costs...

The Rise of Micro-Influencers

The dominance of influence marketing has taken the world of online marketing by storm. In a consumer market that is increasingly sceptical of brands, companies are outsourcing their promotion to...

Taking Advantage of Family Lawyers in Sy…

Family lawyers in Sydney offering a free consultation is a scenario that citizens should take advantage of. There are so many costs that are incorporated in a legal battle, so the...

How to get the most out of your internsh…

A lot of young students and those fresh out of university think that once they have an internship in the bag, it’s all smooth sailing. However, if you have been...

Why working with a professional content …

There is whole new world out there for those who have just started to dip their toes into the subject of search engine optimisation. There are courses that people can...

How to clean up your SEO when you are wa…

What people are more likely to be excited to talk about in this day and age is when they are starting projects, especially if they are creative ones. What they...

A Guide to Shipping Personal Belongings …

In today's times' many people from students to more mature workers are looking for more lucrative job options in other countries including Australia. There are a lot of opportunities for...

What Does It Take to Get Rid of An Old C…

All old cars do is depreciate. Which is why it is useless hanging on to them. Hanging on to an old car is like hanging on to an old relationship...

Is it worth getting roadside assistance?

Roadside assistance acts as a form of protection that comes to your rescue when your car breaks down on the road. All you need to do is to call for...

Difficulty moving

Moving to a New City or Town Alone If you have chosen to move to a new city or town take the time to have your friends and family help you...

Meet new neighbors

Yourself Visible You have new neighbors and you’re not sure what they will be like. While you don’t know make yourself visible to your new neighbors so that they can see...

De-Cluttering Before a Move? Consider a …

When you move, you don’t want to take all your clutter with you. Clearing it out can save you money when the removalists arrive to take your belongings to your...

Business Hacks: 6 Practical Money Saving…

Running a profitable business means staying on toes; you have to establish a competitive edge, keep up with the ever-evolving changes, cut unnecessary costs, and maximize profits. Among the pressing...

How to Avoid Being Scammed When Hiring a…

If you’ve ever been in a position where you needed the services of an automotive locksmith, then chances are that you’ve been worried about getting scammed. And such concerns are...

Savvy Sales - 5 Small Gestures That Have…

While first impressions are important for setting an image in business, it’s your ongoing actions and treatment of clients that will secure your reputation in the long run. Grand “romantic”...

6 Tips for Maximising a Small Office Spa…

Everyone working in an office dreams of the day they land that big promotion – the one that comes with a private corner suite, complete with a huge desk and...

Perfect Your Promotions - The 5 Keys to …

Hosting a successful corporate event is challenging, to say the least. This kind of event is important because it presents endless opportunities for growing your business, enhancing your network, and...

4 Questions You Should Ask Your Commerci…

Demolition contractors are a dime a dozen, and you can’t roll the dice or simply go with recommendations when picking one. Choosing the wrong contractor could result in a poor...

Avoiding Rookie Mistakes: What You Shoul…

The Australian real estate economy remains one of the country’s most profitable sectors to build a career in. However, when you start out for the first time, it is common...

A Guide: Giving Your Online Audience Wha…

If your website/blog no longer engages your audience or if your online store no longer stocks products that are relevant to their needs, you will stand no chance whatsoever of...

Best Mobile Apps for Managing Your Busin…

Running a business is not as easy as it sounds. You have to ensure that your finances are in order, meet new business clients, communicate to your customers and resolve...