Stock markets have been an important means of investment for a long time. Compared to that, bitcoins traditionally have been approached as digital currency. Although that is bitcoin’s principal use, its application is not restricted only to this.
Despite its volatile nature, bitcoin has proved to be a viable alternative asset class for millions of people.
Below is a comparative study that might help you distinguish between investing in bitcoins and in stock markets:
1. Profit-Making Capacity
Investing in the stock markets require a lot of patience as making a considerable amount of profit on your investment is a slow process and could take a few years.
Bitcoin has been famous for its volatile nature as there are massive swings in its value within a very small time period.
Therefore, buying bitcoins with the same amount of risk taken as investing in the share markets, could prove to be a swift alternative in terms of profit-making.
2. Global Reach
Bitcoins have no borders as they are accepted in over 180 countries worldwide. They are truly global in nature and easily transferable with incredibly low transaction fees. As opposed to this, many traditional investments require formal accreditations, are limited to qualified institutional buyers and also invite high trading fees.
This quality of bitcoins is addressing the concerns of many large institutions and retail investors and inviting them onboard.
It is a known factor that Bitcoins can never be created beyond 21 million in number. The use of bitcoins by more and more merchants is causing a steady rise in the demand for Bitcoins. The limited supply factor is very important as it will ensure that demand is always more than supply, making it sensible to invest in Bitcoins.
On the contrary, there is no such limitation imposed in the share market which ensures a predictable trend between demand and supply.
4. Risk Factor
There has been some concern over the volatile nature of the bitcoin system, as it is based purely on demand and supply. However, the risk is the same in the case of the share market as well.
The differentiating factor here is that the stock market is safe in terms of government backing, while bitcoins belong to a decentralized network. Yet, there are many who have been able to trust this network and have made profits ranging in millions of dollars.
5. Ease of Trade
Stock markets take away a considerable amount of investment as trading charges, brokerage charges, taxes, etc. To start trading on the stock market, one has to go through the hassle of finding a registered broker to start a demat account and further lose a considerable part of the investment in brokerage charges.
On the contrary, buying bitcoins is lucrative, with its minimal transaction fees. These transactions are also clean, fast, transparent and non-reversible transactions. All you need to do is pick a bitcoin wallet and ensure you give the right wallet addresses while trading.
Wrapping up, bitcoins have become a global phenomenon and are accepted in over 180 countries worldwide Regardless of the fluctuations in value, bitcoins remain independent. They are not affected by the policies of any government or financial institutions. The limited supply of bitcoins ensures a greater demand than supply. Transactions made through bitcoins are cheaper, with low transaction fees