In 2023, there are still people who do not know what cryptocurrencies and Bitcoin in particular are. Also, there is a certain caste of people who have a very negative attitude towards this type of asset and call it all a pyramid or MMM. Let's figure out what are the pros and cons of cryptocurrencies compared to the stock market.
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👍 Pros of cryptocurrencies
1. Cryptocurrency exchanges operate 24/7.
Many will say that this is, on the contrary, a minus, but this is far from true. Let's remember any stock that, for example, fell from $20 to $9.65 with a gap. If the stock market worked 24/7, then a reasonable trader, when buying a security in the region of $17-23, would set a stop loss, which would work perfectly. And then the paper opened with a gap of -50% immediately and stops, of course, did not work for buyers.
2. High volatility
You and I can take more than 40% of the profit per day due to high volatility; in the stock market in most cases you will have to wait from several weeks to several months. Subject to risk management, this is a huge plus, as well as for accelerating the deposit if it is small.
3. Registration on any exchange in a couple of minutes
Unlike the stock market, registering on a crypto exchange will not take more than 2 minutes + any entry threshold, even $1.
4. Security of your savings
If you store all crypto assets on an exchange, then of course there is a risk of loss, but if you store assets on a cold or hardware wallet, then the security of the assets depends entirely on you. These types of wallets cannot be hacked at all. Also, you can easily transport your money wherever you want. For example, you are unlikely to be allowed on a plane with a suitcase of money.
5. Limited edition
This point does not apply to all crypto-assets, but in particular in Bitcoin the maximum number of coins is strictly specified and cannot be increased in any way. Let's remember what the US authorities are doing with the dollar and how it affects the economy - they stupidly print money when needed.
6. Decentralization
This point also does not apply to all coins, but to the majority. That is, cryptocurrency does not have a central governing body, and all decisions are made by network users. It is not surprising that, given the lack of trust in the authorities, people are turning to crypto.
7. Taxes
When working with crypto, you can avoid paying taxes. Yes, some countries already tax cryptocurrency transactions. It’s just not entirely clear how they are going to implement this.
👎 Disadvantages of cryptocurrencies
1. No protection or insurance against losses
Due to low volatility in traditional markets, insurance of investment portfolios is practiced. This is not practiced in cryptocurrency markets, as the movements can be so strong that insurers simply do not have enough funds to cover losses if the market becomes chaotic.
2. Very shy
Not all crypto assets are good, there is a lot of scam in this market, so you need to carefully study the crypto project before purchasing. For beginners, I recommend buying only the TOP 20 coins by capitalization. Also, there are cases of hacking of crypto exchanges, but top crypto exchanges compensate users for losses due to hacking. Therefore, it is better to store free funds on a cold or hardware wallet, rather than on an exchange, so as not to lose them.
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