An Interesting Comparison Of The Two Financial Worlds #001
Hello crypto friends,
It is a great opportunity to come before this great community today to discuss with n another issue of great importance in the cryptospace.
Today, we shall be learning in the differences between traditional trading and crypto trading.
Traditional trading can be explained to be a practice that involves the buying and selling of financial commodities such as stock, derivatives, commodities or currencies through an established Financial market.
While crypto trading on the other hand can be explained to be the buying and selling of cryptocurrency through a legalized cryptocurrency exchange.
COMPARISON BETWEEN TRADITIONAL AND CRYPTO TRADING
There are several differences between traditional and crypto trading and today, we shall be examining some major ones.
- MARKET CHARACTERISTICS:
Market characteristics is one major difference between a traditional trading and a crypto trading.
The traditional trading such as forex/stock exchange carry out their operation on a well organized/established institutional structure, and are supplied with a strict regulatory clearance.
Crypto trading on the other hand operates using a blockchain technology which implies that the crypto trading operation is decentralized and free from the intervention of the central authority.
This implies that the cryptomarket is always open 24/7 and you can always trade whenever you want.
- ASSET TYPES:
Another key difference between the traditional trading and crypto trading is the asset being traded.
These two market trades on entirely different assets and the traditional trading is often involved with selling and buying of stocks, commodities, fiat currencies and these assets are backed up by the government or a well known institution.
The cryptomarket on the other hand deals with the trade of only digital assets which is popularly known as cryptocurrency.
These cryptocurrencies traded in the crypto market is backed up by the blockchain technology and are not being controlled by the government not a central authority.
- REGULATORY ENVIRONMENT:
Another significant factor that different between traditional trading and crypto trading is it's regulatory environment.
The governmental organization plays a good role in maintaining market integrity, stability and investor protection, they help in regulating the market operation.
They monitor the activities in the market and ensure it is safe for investors.
The cryptomarket on the other hand undergoes some level of scrutiny across the globe, with some countries accepting it's transaction while some declining it for the moment.
- RISK PROFILE:
Although both the traditional trading and crypto trading are subject to lots of risk but the risk involved with the traditional trading is lesser than that of the crypto trading.
The traditional market is considered to be more stable when compared with the crypto market.
The cryptomarket is very volatile and users can loose all their funds at a goal.
Thank you, friend!
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An Interesting Comparison Of The Two Financial Worlds is a great article..
Yeah, it sure is
I think traditional system cannot be rule out yet, since we still need traditional cash in our day to day activities
Yes, you are right.
Thanks for stopping by