Crypto vs. The Stock Market

 Jacob Bruner

Within just over a decade, starting in 2008-2009, Bitcoin has gone from $4 in 2008 all the way up to $65,000 in 2021.

The entire cryptocurrency market has completely changed how people have been making money. Other cryptos like

Dogecoin, Cardano, and Litecoin have also been invented along with hundreds of thousands of other types of cryptocurrencies.

However, these are not in our conventional stock market. They do not belong to the S&P 500 or are not traditionally

traded through normal brokerages. So, what is the difference between cryptocurrencies like Bitcoin and normal publicly

traded companies like Apple, Samsung, and Amazon? 

Cryptocurrency is very similar to normal stocks in our stock market. It can be used for payment in certain situations

and has even become the national currency in El Salvador. Currencies like Bitcoin are essentially transactions from

a third party with binary data that gives its value along with the supply and demand of the coin. According to

Anshu Siripurapu, “The prices of Bitcoin and many other cryptocurrencies vary based on global supply and demand. However,

the values of some cryptocurrencies are fixed because they are backed by other assets.” (www.cfr.org). It is

commonly compared to poker chips at casinos where you can exchange money for another form of money. The part that

confused myself for the longest time is that there is not a good or service associated with the specific cryptocurrency. For example,

Bitcoin will not offer you a specific service nor good. Dogecoin does not provide you with any goods or services.

Also, the math is much easier to calculate. Although this may sound odd, in the stock market you must purchase a whole

share of the company. For reference, if a share of Tesla costs $1,000, you must purchase the whole share. However, this

is not the case for crypto. Consumers are able to purchase specific amounts of a share. Because of this, it allows more people

to be in the market for thriving coins.

Whereas in the stock market, S&P 500, each company will provide a good or service that can be purchased.

Then, the size of the company essentially reflects the price of the individual stock price. In the stock market, it is much

easier to predict the future prices of the goods due to quarter reports released to the public. This is why most people question

entering the crypto currency market, because it is much less predictable. 

The meme above demonstrates the unpredictability of cryptocurrency vs. stocks. Cryptos have a much more likely chance to

fluctuate large amounts compared to stocks.

To conclude, cryptocurrencies and stocks may sound very similar, but after all they are very different. The determinants

of price, how to purchase them, and predictability make them a very new and exciting system to make money.

Works Cited

“Open Source P2P Money.” Bitcoin, bitcoin.org/en/.

Royal, James. “Cryptocurrency Vs. Stocks: What's The Better Choice For You?” Bankrate, www.bankrate.com/investing/crypto-vs-stocks/.