Cryptocurrency or the stock market. What to choose for a beginner

There are more and more people who want to provide for themselves and retire much earlier than the state. And everyone is well aware that a passive income is necessary for a full-fledged old age. But how to get it? Today we will talk about the differences between cryptocurrency and the stock market, where it is better, and most importantly, more profitable to invest.

Why it’s important to start investing

The sooner you start investing and multiplying your income, the sooner you can forget about the word work. Of course you can save your money under the pillow, but surely it’s better when your money makes even more money. Passive income is an integral part of any investor, there are many ways to get it: real estate, securities, cryptocurrency, cars, and more.

But today we will compare the stock market and the recently emerged cryptocurrency. Of course someone can say that it is not worth comparing an entire investment system with cryptocurrency. But it is still worth considering, because no one knows what will happen with cryptocurrency in 5 years, maybe it will replace the stock market.

Let’s take a closer look at cryptocurrency and the stock market.

Stock market

The stock market is where all securities are listed: stocks, bonds, funds, indices, etc. Now it is online, but just 50 years ago, in order to buy an investment asset, you had to contact a broker and only through him to execute a transaction. Now all brokers are in the form of an app, website, etc.

Securities trading is highly localized. For example, the U.S. stock market trades not only assets of U.S. companies, but stocks, bonds, obligations and contracts of almost all international corporations. The same is true of the London, Tokyo and some other world exchanges.

But the question arises what prevents you from trading directly on the stock market without paying broker’s commission. But to get access to the stock market one must have a huge number of permits, it would be quite problematic for an ordinary mortal to formalize everything. It is much easier to work through the stock exchange.

The main ways of earning on the stock market

Dividends – every quarter, the company pays dividends to its investors, because when you buy an asset of the company, you become a part-owner of the company. That’s why the company pays you a portion of the profits it earned during the quarter.

But it is worth knowing that not all companies pay dividends. There are companies that invest their profits in the further development of the company, such as Yandex.

Trading is the work with assets on the stock exchange. Buying and selling at the most favorable price. Just do not confuse trading with binary options, these are two different things that work in their own way.

Scalping is one of the most well-known strategies of traders in the stock, currency or commodity markets. The peculiarities of this strategy lie in the fact that a trade in assets is completed when the highest profit of a few pips is achieved.

Cryptocurrency

The cryptocurrency market allows you to buy and sell various tokens. Bitcoin, Etherium, Tron – it can all be bought there.

Trading is done in a convenient ratio of currencies, as they are also called “currency pairs”. For example, you decided to buy a couple of Bitcoin coins, you should look at the USD/BTC ratio when buying. 

It’s the same situation in the forex market. This means that you will be speculating on the value of a digital currency in relation to another asset. This could either be a fiat currency, such as U.S. dollars, or an alternative crypto-asset, such as bitcoin. Either way, crypto pairs change in value every second – just like all financial markets.

Main ways of earning in cryptocurrency

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For example, a pair of USD/BTC is $35,000. So we can say that 1 Bitcoin coin is worth $35,000. Your income depends on your decision: to buy or sell. For example, let’s take a situation, you bought a coin for $35, three hours later the price is $42 and you decide to sell it. Your proceeds are $7.

Stacking is a mechanism that rewards users for locking their coins or tokens for a period of time, thereby securing the network and validating transactions. Kind of like a deposit in a bank, isn’t it?

Conclusion

Every investor has a different opinion of what is better and worse. But if you choose investment ability, reliability and popularity, the stock market is better. But if to consider as a type of data storage anonymously, cryptocurrency is better of course.

But what is best for you is up to you to decide. What is closer and more profitable, that is your choice. Good luck with your investments!

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