THE CRYPTOCURRENCY MARKET AND THE NEXT STOCK
Hey guys,
Welcome to my blog.
Today, we will be discussing on the cryptocurrency market in relation to stock and their success over the last decade.
When businesses realized they needed to rely on the public for funding rather than bank loans and money from friends and family in the early 19th century, the stock market was born.
Companies can sell small portions of their corporate ownership to the general public on the stock market in exchange for a fixed price.
There are dozens of companies selling stocks on the stock market today in an effort to raise money.
Almost every company that we are aware of has stock that can be purchased on the market for a variety of rates.
Since the advent of crypto tokens, there have been an increasing number of tokens in use. Additionally, a large number of tokens are being created every day to serve a variety of purposes, which has led to the emergence of the cryptocurrency market.
This prompted the development of numerous sites known as exchanges where the general public may buy and sell these tokens.
The sum of all existing crypto tokens is what is referred to as the "crypto market," which is the collective name for this market.
The market for cryptocurrencies is currently estimated to be worth $1.2 trillion.
Taking a closer look on the crypto and stock market we will observe a lot of similarities and some of them will be explained below. The public is welcome to invest in either the stock market or the cryptocurrency market, making it possible for anyone to do so and increase their chances of making money. Both the cryptocurrency and stock markets experience significant price fluctuations throughout the course of any given day as a result of the forces of supply and demand. Both the cryptocurrency and stock markets experience significant price fluctuations throughout the course of any given day as a result of the forces of supply and demand. Technical analysis can be used to analyze the price movements of both stocks and cryptocurrencies. This can be done by using price action analysis or more basic techniques like moving averages.
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In as much as there's series of similarities between cryptocurrency and stock, there also vary in various ways which will be explained below.
- Ownership
The ability to own stocks is subject to a number of restrictions, including the requirement that the owner disclose his or her country of origin. Frequently, nations like America forbid citizens of other nations from freely purchasing stocks.
However, with cryptocurrency, you can purchase cryptocurrency tokens from any country.
- Taxation
The issue of taxation is unique to only stocks since those who deal in stocks must pay the government a portion of their profits in the form of taxation.
Proceeds from trading in cryptocurrencies are largely taxed by the government.
- Volatility
Even though both types of assets are extremely volatile, a closer examination reveals that the cryptocurrency market is more volatile than the stock market.
Consider the latest Luna crash, where the price of Luna fell from 119 to 0.0000 or something similar.
Although such crashes do happen on the stick market, they are quite uncommon.
- Acceptance
Dealing in cryptocurrencies is still prohibited in several nations, including Nigeria, where the government has deemed them to be the property of criminals.
It is heartbreaking to learn this, but it is true that cryptocurrency is unwelcome in Nigeria and that anyone who trades it runs the risk of being identified as a suspect by the authorities.
Both stock and cryptocurrencies can be categorized into different types, form, and uses.
| STOCK | FORM | EXAMPLE |
|---|---|---|
| Consumer goods | Companies that provides food to sell at retail | Mac Donalds |
| Financial | Banks, real estate companies, insurance | State farm. |
| Conglomerates | Global companies | Amazon. |
| Healthcare | Drug companies, medical equipment suppliers, etc. | Johnson and Johnson. |
| Industrial goods | Manufactoring companies | Tesla, Tayota, etc. |
| Technology | Computers and software companies | Microsoft. |
| CRYPTOCURRENCY | FORM | EXAMPLES |
|---|---|---|
| Altcoin | Volatile with uses cases | Steem, BNB, TRX, etc. |
| Memecoin | Highly volatile with no real uses cases | Doge coin, Shiba INU, Safemoon, etc. |
| Stablecoin | Very less volatile. Can be considered as stable. | Usdt, SBD, USDC, USDD, etc. |
| DeFi tokens | Mostly used for governance | Avalanche, Uniswap, chainink, etc. |
| Metaverse coins | Mostly used in making payments on various metaverse platform | Apecoin, MANA, sand, etc. |
Without a doubt, cryptocurrencies are the way of the future. In the short period of time since they were introduced in 2009, the market capitalization of cryptocurrencies has increased to the point where it may reach $3 trillion by the end of 2021. This shows how heavily the general public relies on cryptocurrencies.
In the past few years, we have seen a ton of nations legalize cryptocurrency and even accept it as a form of payment, and very soon, many more nations will do the same as El Salvador.
Kazakhstan increases Bitcoin mining and contributes more than 10% of the system's overall hash rate.
Yes, cryptocurrency is a force to be reckoned with, but we must not lose sight of the fact that the best teacher is experience, so we must exercise caution when trading in the cryptocurrency market.
We shouldn't enter the crypto market expecting to succeed immediately or within the first week; instead, we should move slowly and steadily. We'd make it there.
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