Cryptocurrency Vs Stock Trading
The cryptocurrency world can be officially said to have joined the big league as the total value of the market has since crossed the half a trillion dollar threshold, stemming from the insatiable demand for the digital currencies from the public. As a big sector of business that has trade volumes in the tens of billions of dollars every day, a lot of people confuse concepts like the Initial Coin offerings in the cryptocurrency universe to IPOs, and also mistake cryptocurrency trades to be similar to trading in shares on the stock market. This cannot be further from the truth, as we will see in this piece
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Shares against Tokens
The fundamental difference between the stock market and the cryptocurrency trading industry stems from the fact that its real companies’ with real tangible assets shares that get sold and bought on the stock markets, while the cryptocurrency markets trade in abstract digital currencies whose value is driven by the sheer volume of demand, rather than any physical assets or other tangible indices. The stock trade is a well established market with history and comprehensive legal frameworks and legislation, while the cryptocurrency markets are rather new, and as of now, there is little or legal framework under which they operate despite amassing very huge values.
The cryptocurrency industry some say is anarchist in its make, as they are not issued by any government and the move fluidly across borders at an instant, with little or consequences for those issuing them in case of problems. While the stock market has very sophisticated rules from issuing to trading, with strict penalties for defaulting traders that use the market with insider knowledge
The new 24 Hour Trade
Cryptocurrency in almost every aspect is revolutionizing the way we do things, among which is the fact that it trades non-stop everyday of the year, at an extremely fast pace. While the stock market yet again has times of openings ad closings, and observes public holidays. There are times in history where stock markets were even shut down as a result of a huge crisis, which is in stark contrast to the cryptocurrency trade industry. Having seen its fair share of trouble, the cryptocurrency markets are in their nature impossible to shut down, therefore no matter how bad the storm is, it must ride it out, rather tha duck for safety.
Trade Flexibility
The democratic nature of the cryptocurrency also shines through here, as you can trade the minutest possible fractions of a typical cryptocurrency, or conduct a transaction with it. While stocks cannot be traded except in specified minimum volumes. Whatever your budget may be like the cryptocurrency has a place for you, while the stock exchange business is mostly seen as a rich man’s game, that doesn’t allow for micro trading.
Pricing
Stock exchanges are more balanced than cryptocurrency markets when it comes to volatility. The stock market does have its volatile moments but it’s usually caused by different factors such as world political situations, such as wars, or the global price of oil. One the other hand the cryptocurrency market is rather immune to the prices of oil and the possibility of a war in the Middle East. What does make it jitter is the possibility of restrictions in key countries like China, which just recently gave it a wild shake, albeit just temporarily
For future viewers: price of bitcoin at the moment of posting is 8660.00USD
crypto industry is still a baby when compared to stock markets . it never crossed a trillion dollar mark. the day we reach 3 trillion market cap can make bitcoin go around 100k$
Crypto assets are very different to shares as they can represent many different rights a holder has vs stock represent a participation of a public company or business. Cryptos can be platforms, utility tokens, security tokens (like shares), currencies, applications and even commodities. Another aspects is that they can be built to be interconnected and are much more efficient while remaining transparent. Stocks today still takes 3 business days to settle while cryptos are exchanged as soon as transactions get registered to their respective blockchain. The potential is huge considering the gap in market capitalization that we currently see.
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There is no difference between the "real tangible assets" that IPO companies have and the assets that ICO companies have. It is irrelevant whether they are traded in the form of shares or tokens. To state that token traded companies have no physical assets is completely incorrect and misleading.
You also can't use terms like ICO, cryptocurrency, token, digital currency etc interchangeably. There are fundamental differences between them, and using them this way creates great ambiguity.