Crypto vs. Stocks – What is the right market for you?

Disclaimer: The remarks that follow do not constitute investment advice for any other financial goods, services, or digital assets. They are meant to offer general knowledge.

In the following article, we are going to answer the question of Crypto vs. Stocks – What is the right market for you? Let’s find out how a new investment option (crypto) has managed to give a long-established asset class (stocks) a run for its money. To improve your crypto investing check Algory tool and to know more about crypto technology check our educative material. Investors have always had multiple investment choices which have typically included stocks, bonds, real estate, and many others. Over the last decade, a new investment option by the name of crypto has slowly made its way into the market.

Crypto vs stocks blockchain

Crypto vs. Stocks – Definitions

  • Crypto – Crypto is short for cryptocurrency and they are digital assets that run on the Blockchain distributed technology and are secure by cryptography. Most were intended to operate as a medium of exchange or a store of value. Also, they are prone to higher price volatility and risk.
  • Stocks This is an asset class that represents fractional or partial ownership of the shares, equity, or interest in a company. They can yield both long-term and short-term returns. Sometimes, the owners of stocks are entitled to a share of the company’s profit in the form of dividends. Usually, its value is affected by factors such as relevant news announcements and company performance.

While they are different asset classes, both crypto and stocks are tradeable and are viewed as investment vehicles.

Crypto vs. stocks – Characteristics

  1. Crypto vs. stocks – their source of value

Stocks represent ownership of an actual business and therefore investors base their decisions on business results, cash reserves, and growth prospects among other factors.

The market value of a cryptocurrency comes down to supply and demand. The goal is to find someone willing to buy at a higher price than your buying price.

  • Crypto vs. stocks – Governance

The stock market has a long history with more than a century’s worth of regulation and legislation baked into every transaction. There are firm rules for how you trade, own, and manage your stocks. You can earn a postgraduate degree and have an entire career in just the taxation aspects of stocks-based gains.

Crypto currently lacks a regulatory framework most countries are just starting to work out their respective crypto regulations. The regulatory future of cryptocurrencies is up in the air, and many investors simply will not enter the crypto market until there is a clear rulebook in place.

  • Crypto vs. stocks – trading

The basic trading experience is similar, you open an account with a broker, deposit some money into the account, pick an asset and place the order. The only difference is that you will need a crypto wallet to store your crypto assets.

Crypto vs. stocks – similarities

  1. Risk and volatility

Any worthwhile investment has some level of risk attached to it. For stocks and crypto, this risk is largely caused by price volatility. This is especially true when observed over an extended period.

  • How they are transacted

Both assets are bought and sold through exchange/brokerage platforms. The lines between these two are becoming increasingly blurry; investors can therefore access and trade both assets on the same platforms without friction.

  • Scams

Both equities suffer from fraudulent behavior because of the temptation to make quick money. Pumps and dumps happen to be quite popular with both crypto and stocks.

  • Popularity among institutional investors

Both crypto and stocks are more popular with institutional investors than individual investors. Both assets are generally viewed as a chance to amass wealth.

Crypto vs stocks - chart

Crypto vs. stocks – Differences

  1. Supply

While some cryptocurrencies have a fixed total supply, most generally don’t have a limit on the total number that can be minted or mined.

Stocks, on the other hand, tend to be less variable as the amount f shares outstanding is controlled and ultimately backed by the operations of the issuing company.

  • Regulation

Stocks/equities are generally scrutinized by securities and other regulators. Cryptocurrencies remain largely unregulated which makes them very appealing to some investors and scary to others.

  • Purpose

While most cryptocurrencies were designed as transactional currencies, stocks were generally meant to serve as a fraction of ownership of the issuing company.

  • Technology

Most cryptocurrencies are programmable being that they are underpinned by Blockchain technology.

Stocks, on the other hand, are not programmable in any way. Their uses include capital appreciation, dividend cash flow, and voting rights.

  • Diversification

 Stocks allow you to select from practically every sector and country in the world. This allows you to put together a highly diverse portfolio that isn’t fully dependent on a particular industry or geographical market. In return, this can help reduce your risk of losing everything.

Cryptocurrencies are more similar and perform the same way. There is no way to fully diversify your investment. This leaves you in a riskier position.

Crypto vs. stocks – what is the right market for you?

  1. Crypto
Pros Decentralized nature. Enhanced privacy features. Higher profit margin due to high price volatility. There are many helpful investment and educational tools available such as High-powered automation options thanks to smart contracts. It is borderless. It is inflation resistant. Flexibility in ways to grow your holdings besides trading. Cryptocurrencies are varied in nature and they address different investment needs.  Cons Extreme price volatility. Lack of proper regulation. Prone to thefts and hacks. If you lose your private keys, it is impossible to recover your money. The returns are not guaranteed.  
Pros Stocks are very accessible especially now with smartphones They have an existing regulatory framework. They are somewhat inflation-resistant. There are many stock varieties available. They have a great track record. They have an intrinsic value which is not the case for crypto  Cons They are prone to price volatility. Their fees are generally higher than crypto. Returns are not guaranteed. Their potential for extreme gains is much lower than crypto.  

Crypto vs. stocks – which has a brighter future?

It is a good practice to consider the immediate future of an investment before involving your money. So, between crypto and stocks, which one has a brighter future?

With crypto regulatory reforms currently underway, the cryptocurrency ecosystem is set to evolve even more dramatically in the foreseeable future. It should be expected to present a whole new set of challenges, quirks, and opportunities.

Meanwhile, the stock market should be expected to continue moving at a slower pace; having dealt with the bulk of its growing pains many decades ago. For that reason, stocks are much safer than crypto and still present a wealth-generating opportunity.

In nutshell, you should keep your crypto exposure small for now, keeping in mind the speculative and exciting yet largely unproven opportunities.


For the question of crypto vs. stocks, there are no one-size fits all answers. This is especially because different people have different investment needs. Simply put, you are likely to lose much more sleep worrying about the security of your crypto investment than you ever did about stocks. Yet again, a solid investment portfolio should contain a diverse mix of assets. Putting money into both stocks and crypto helps spread your risk.