{"id":5827,"date":"2021-11-25T18:21:28","date_gmt":"2021-11-25T12:51:28","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=5827"},"modified":"2022-05-24T10:31:09","modified_gmt":"2022-05-24T05:01:09","slug":"stocks-vs-cryptocurrency","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/","title":{"rendered":"Stocks vs Cryptocurrency: Which Is Safer?"},"content":{"rendered":"\n<p>If not for the uncertain legal status of <a href=\"https:\/\/www.tickertape.in\/blog\/10-interesting-facts-about-cryptocurrencies\/?utm_source=blog&amp;utm_medium=article\">cryptocurrency<\/a> in India, would you have or have you already invested in the digital asset yet? Or do you think it is too risky and extremely sensitive to how the big investors engage with it? If yes, doesn\u2019t the same apply to <a href=\"https:\/\/blog.tickertape.in\/types-of-shares\/?utm_source=blog&amp;utm_medium=article\" rel=\"nofollow noopener\" target=\"_blank\">stocks<\/a> as well? Well, if both are risky, which one of them is safer? Let\u2019s find out.<\/p>\n\n\n\n<p>Everyone is talking about <a href=\"https:\/\/www.tickertape.in\/blog\/cryptocurrencies-vs-mutual-funds\/\">cryptocurrencies<\/a>. They are literally all over the news. And the one thing you can\u2019t help but notice is its extremely volatile nature. But stocks are <a href=\"https:\/\/www.tickertape.in\/blog\/trading-opportunities-in-volatile-markets\/?utm_source=blog&amp;utm_medium=article\">volatile <\/a>too. In fact, they have the power of crashing the entire financial market. Think the Great Depression, <a href=\"https:\/\/www.tickertape.in\/blog\/facts-about-harshad-mehta\/\">Harshad Mehta<\/a> Scam, and Lehman Brothers\u2019 crisis.<\/p>\n\n\n\n<p>So, if both cryptocurrency and stocks can be turbulent, which one would be a better investment for you?<\/p>\n\n\n\n<p>Let\u2019s first understand what shares and cryptocurrencies are.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#What-are-stocks\" title=\"What are stocks?\">What are stocks?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#What-is-a-cryptocurrency\" title=\"What is a cryptocurrency?\">What is a cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#How-are-stocks-and-cryptocurrency-different\" title=\"How are stocks and cryptocurrency different?\">How are stocks and cryptocurrency different?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#Are-stocks-safer-than-crypto\" title=\"Are stocks safer than crypto?\">Are stocks safer than crypto?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#1-Risk-and-return\" title=\"1. &nbsp; Risk and return\">1. &nbsp; Risk and return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#2-Predictability\" title=\"2. &nbsp; Predictability\">2. &nbsp; Predictability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#3-Future\" title=\"3. &nbsp; Future\">3. &nbsp; Future<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#4-Security\" title=\"4. &nbsp; Security\">4. &nbsp; Security<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#1-Is-cryptocurrency-legal\" title=\"1. &nbsp; Is cryptocurrency legal?\">1. &nbsp; Is cryptocurrency legal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#2-What-are-the-different-types-of-shares\" title=\"2. &nbsp; What are the different types of shares?\">2. &nbsp; What are the different types of shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#3-Are-all-shareholders-owners-of-a-company\" title=\"3. &nbsp; Are all shareholders owners of a company?\">3. &nbsp; Are all shareholders owners of a company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#4-What-is-blockchain\" title=\"4. What is blockchain?\">4. What is blockchain?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#5-Why-is-blockchain-considered-safe\" title=\"5. &nbsp; Why is blockchain considered safe?\">5. &nbsp; Why is blockchain considered safe?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#6-How-does-blockchain-work\" title=\"6. &nbsp; How does blockchain work?\">6. &nbsp; How does blockchain work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.tickertape.in\/blog\/stocks-vs-cryptocurrency\/#7-Is-cryptocurrency-different-from-blockchain\" title=\"7. &nbsp; Is cryptocurrency different from blockchain?\">7. &nbsp; Is cryptocurrency different from blockchain?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"Stocks\"><span class=\"ez-toc-section\" id=\"What-are-stocks\"><\/span><strong>What are stocks?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Although there are various <a href=\"https:\/\/www.tickertape.in\/blog\/shares\/\">types of shares<\/a>, stocks are synonymous with <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> shares. Stock is a portion of a company\u2019s capital. Hence, it gives the shareholder part-ownership of the entity, voting rights, and dividends at the discretion of the company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Crypto\"><span class=\"ez-toc-section\" id=\"What-is-a-cryptocurrency\"><\/span><strong>What is a <\/strong><strong>cryptocurrency<\/strong><strong>?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A form of digital or virtual currency, crypto is secured by cryptography. You can buy units of them called tokens and use them as a medium of exchange to buy or sell goods and services. Unlike a traditional currency, crypto has no issuing agency but works on blockchain technology.<\/p>\n\n\n\n<p>Blockchain is a decentralized technology managed by a network of computers, which makes it possible for anyone with knowledge of programming to mine cryptos. They are known to be transparent and secure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Difference\"><span class=\"ez-toc-section\" id=\"How-are-stocks-and-cryptocurrency-different\"><\/span><strong>How are stocks and cryptocurrency different?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Both are types of investments. However:<\/p>\n\n\n\n<p>1. Cryptos are relatively newer than stocks. The famous crypto Bitcoin was only introduced in 2009.<\/p>\n\n\n\n<p>2. In the case of crypto, you buy tokens in exchange for fiat currency. You can either use them as a form of payment or simply hold them expecting an increase in their value. In the case of equity stocks, you buy a share in the company and hence are entitled to part-ownership and potential profits. You hold the shares in hopes of the price increasing and receipt of <a href=\"https:\/\/www.tickertape.in\/blog\/cash-dividend-vs-stock-dividend\/\">dividend<\/a> if any.<\/p>\n\n\n\n<p>3. Unlike a stock that is traded on a traditional stock exchange and stored in a <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-transfer-shares-from-one-demat-account-to-another-complete-process\/?utm_source=blog&amp;utm_medium=article\">Demat account<\/a>, cryptocurrencies can only be bought and sold on a crypto exchange and stored in a digital wallet.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2293\" height=\"4780\" src=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov.png\" alt=\"\" class=\"wp-image-5830\" srcset=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov.png 2293w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov-144x300.png 144w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov-491x1024.png 491w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov-737x1536.png 737w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/Stocks-or-Cryptocurrency-Which-is_-25-Nov-982x2048.png 982w\" sizes=\"(max-width: 2293px) 100vw, 2293px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Safe\"><span class=\"ez-toc-section\" id=\"Are-stocks-safer-than-crypto\"><\/span><strong>Are stocks safer than crypto?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let us look at a few factors that will help you decide which of the two options is safer.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-Risk-and-return\"><\/span><strong>1.<\/strong> &nbsp; <strong>Risk and return<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per Coinmarketcap.com, <a href=\"https:\/\/www.tickertape.in\/indices\/nifty-index-.NSEI?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Nifty <\/a>had zoomed 73% in FY 2021 until 19 March. Bitcoin, on the other hand, had rallied more than 840%. Although cryptos have generated higher returns than stocks, the associated risk is also higher. Remember, the higher the risk, the higher would the returns be and vice versa. That is to say, a cryptocurrency is highly risky compared to stocks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-Predictability\"><\/span><strong>2.<\/strong> &nbsp; <strong>Predictability<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Because crypto is relatively novel, predicting its movement and response to the market is not known well. While the <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a> has exhibited its sensitivity to the economy, government policies, and investor sentiment, the same is not known for cryptocurrencies. True, Bitcoin and Dogecoin have been reactive to Elon Musk\u2019s word. But that is not enough to draw a genuine conclusion.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-Future\"><\/span><strong>3.<\/strong> &nbsp; <strong>Future<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another factor to consider is that stocks have been around for decades now. Although volatile, masses are familiar with the concept. In contrast, cryptocurrency is a relatively new investment. And its future is uncertain. It could be either be a game-changer for investors or burst like a bubble. In terms of money, you could either make a lot or lose a lot.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-Security\"><\/span><strong>4.<\/strong> &nbsp; <strong>Security<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A stock market is regulated by government agencies. In India, <a href=\"https:\/\/www.tickertape.in\/blog\/securities-and-exchange-board-of-india-functions-powers-and-regulations-of-sebi\/?utm_source=blog&amp;utm_medium=article\">SEBI <\/a>regulates the markets. It intervenes when necessary\u2014for instance, when stock prices skyrocket without a plausible reason\u2014and demands investigation. The watchdog also penalises the guilty parties. Ergo, the chances of manipulation are less compared to cryptos. Since these are decentralised, cryptos are unregulated and hence prone to fraud.<\/p>\n\n\n\n<p>That said, it is important to study and understand any and every investment product before parking your money in it. That is to say, having a high tolerance for risk is not enough. Besides, diversifying your portfolio is a must to minimise your loss. Especially, when you are looking to <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in a highly volatile instrument like a cryptocurrency.<\/p>\n\n\n\n<p>Now, the answer to which is the best investment is subjective. You are the best judge of your understanding of stocks, cryptos, and your risk tolerance. Think well and research thoroughly before betting your funds on any investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-Is-cryptocurrency-legal\"><\/span><strong>1.<\/strong> &nbsp; <strong>Is cryptocurrency legal?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It depends on the country in which you reside and transact with. Cryptocurrency in India are not illegal but lack regulation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-What-are-the-different-types-of-shares\"><\/span><strong>2.<\/strong> &nbsp; <strong>What are the different types of shares?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Shares are broadly classified into two types:<\/p>\n\n\n\n<ul><li><a href=\"https:\/\/www.tickertape.in\/blog\/what-are-equity-shares-meaning-types-features-limitations-and-more\/\">Equity shares<\/a> and<\/li><li><a href=\"https:\/\/www.tickertape.in\/blog\/preference-share\/\">Preference shares<\/a><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-Are-all-shareholders-owners-of-a-company\"><\/span><strong>3.<\/strong> &nbsp; <strong>Are all shareholders owners of a company?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Both equity and preference <a href=\"https:\/\/www.tickertape.in\/blog\/shareholders\/\">shareholders<\/a> get part-ownership in a company. However, the scope of rights that they are entitled to are different.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-What-is-blockchain\"><\/span><strong>4. What is blockchain?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Blockchain is an electronic ledger that can\u2019t be meddled with. It is similar to an accounting ledger.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5-Why-is-blockchain-considered-safe\"><\/span><strong>5.<\/strong> &nbsp; <strong>Why is blockchain considered safe?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Since blockchain doesn\u2019t require an intermediary, it alleviates the risk of fraud and corruption. The very feature makes blockchain transactions fast and cost-effective.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6-How-does-blockchain-work\"><\/span><strong>6.<\/strong> &nbsp; <strong>How does blockchain work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Blockchain technology is based on a network. It connects millions of computers that can host encrypted copies of the records. Ergo, it has not one record keeper but millions of them, called nodes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7-Is-cryptocurrency-different-from-blockchain\"><\/span><strong>7.<\/strong> &nbsp; <strong>Is cryptocurrency different from blockchain?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Yes, blockchain is the technology based on which cryptocurrencies are mined.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nifty had zoomed 73% in FY 2021 until 19 March and Bitcoin rallied over 840%. But remember, the higher the risk, the higher would the returns be and vice versa.<\/p>\n","protected":false},"author":27,"featured_media":5836,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[9,1749],"tags":[1017,15],"acf":[],"modified_by":"Anjali Chourasiya","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/TT-25-Nov-Stocks-Vs-Crypto-1.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5827"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=5827"}],"version-history":[{"count":7,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5827\/revisions"}],"predecessor-version":[{"id":8518,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5827\/revisions\/8518"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/5836"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=5827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=5827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=5827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}