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What's the difference between trading cryptocurrencies and trading stocks?

What are the main differences between trading cryptocurrencies and trading stocks? Which is more profitable? Let's look into it!
(Page last updated: 17th of April 2021)

Trading Cryptos vs Stocks trading

If you want to compare cryptocurrency trading with stocks trading, there's one major difference - trading cryptocurrencies has a lot more risk involved than stock trading.

That's because of the extreme volatility of cryptocurrencies. If stock prices generally change 0.1-10% a day, it's not uncommon in for crypto value to change 3 or even 100 times that amount.

But that's not all.

Cryptocurrencies can be traded 24/7 while stock markets around the world have set trading hours.

Compared to stock trading, it's also way easier to start trading cryptocurrencies.

That's because multiple different reasons:

  • Less paperwork
  • Lower capital needs
  • No need to use brokers

By the end of the day, it is just a lot easier to start trading cryptocurrencies than it is to start trading stocks.

Easier to create an account in a cryptocurrency exchange or crypto platform, way lower capital needs to get started and to see actual profits.

And most importantly, you can trade cryptos all by yourself without the need to involve a third party like a broker.

So while stock markets are dominated mainly by bigger traders and institutions, crypto trading is more accessible also to individuals.

More differences between crypto and stock trading

When you trade stocks, you essentially buy equity in a company. And the stock price depends on how well the company is doing. Well, if we put it as easily as possible.

When it comes to cryptocurrencies, however, you don't own part of any company that issued the cryptocurrency. And the value of the cryptocurrency is very subjective.

Stock prices can be volatile and sometimes move up or down very quickly if the valuation or subjective impression of the valuation changes.

But the volatility of stock market is nothing compared to the volatility of cryptocurrencies.

So trading cryptocurrencies can be way more lucrative, but it also involves way more risk.

Siim Einfeldt photo
Author: Siim Einfeldt
I became interested in cryptocurrencies only a bit more than two years ago. Since then I have been in investing in cryptos using different exchanges. And I also launched when I started trading, just to share my crypto journey and my results.
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