Over the last decade, cryptocurrency has taken the entire world by storm. The value of digital currencies had grown up to a gigantic $2 trillion. Among these cryptos, the first one of its kind, Bitcoin stays on top of popularity, which itself is now worth about $800 billion. Investors are flowing towards this digital currency rush, but oftentimes with little knowledge and high hopes. In this article, we are listening to the expert opinion in terms of investing in crypto versus equity stocks.
To ensure value appreciation, it is essential to weigh the risks against the expected rewards to ensure the success of the investment. Anyone who is planning for investment should know exactly what they are putting their money into. If you do not have these kinds of information handy, one may fail to make adequate calculations, and in such a case, it becomes more gambling than an investment. So, here are a few things explained by Kavan Choksi about cryptocurrency vs. equity stock investment.
What is a stock?
Stock is the portion of company ownership that the investors can buy. Stocks give the shareholders privilege to the assets and profit of a business. Sometimes, the wiggling stock prices may make you overwhelmed, but you have to do a thorough analysis and look for the potential for profit.
What is cryptocurrency?
Unlike fiat currencies, cryptocurrency is not backed by any hard assets. Cryptocurrencies will allow the holders to perform some financial functions like sending money to another country or the usage of smart contracts to execute payments if certain set conditions are met automatically. Apart from payments, cryptocurrency becomes valuable when you are able to sell your crypto holdings at a higher price than you bought them.
Benefits of investment in stock
- Stocks have a solid history of better returns.
- Stocks have intrinsic value.
- Stocks are accessible anytime to trade.
- There are stronger government regulations in stock trading, making it more secure and reliable.
Benefits of cryptocurrency investment
- Cryptocurrencies offer a possible hedge against fiat currencies.
- Cryptocurrencies have a decentralized nature, not controlled by governments or central banks like fiat currencies.
- It is digital gold, which investors think will protect them against inflation.
- Cryptocurrencies are believed to have the potential for phenomenal growth. People who invested in crypto over the last few years have made big gains in terms of its value appreciation.
- A growing number of crypto coins. There were only a few cryptos available at the initial stage, but now new coins are being introduced on a regular basis, and now there are plenty of choices to make.
- There is a side interest among the global population in digital currencies. Apart from investors, companies and governments are keen on cryptocurrencies both as an investment vehicle and a financial transaction tool.
Kavan Choksi concludes that both equity stocks and cryptocurrencies have unique benefits. For investors, it is ideal to make a balanced choice at this point among these to gain better returns.