In recent times, cryptocurrency has driven the Fintech sector agog. From millionaires to small business owners, entrepreneurs, and people from different walks of life, everyone is trading in cryptocurrency.
Due to its growing popularity, the market cap of this digital asset is about 300 million. This value also has the potential of hitting $10 trillion in the coming years.
It’s interesting to note that there are over 1500+ cryptocurrencies in the world, with a host of crypto tokens. As an entrepreneur, the rise of crypto has been enticing. The virtual currency has attracted traders.
If I should give you a piece of advice, it’ll be to note that trading in cryptocurrency is quite different from conventional trading, like the stock exchange.
Here, I will show you some of the distinguishing factors between both kinds of trading.
Profit-making as a distinguishing factor, by Maxim Bederov
Every entrepreneur seeks to maximize profits. A vital thing you should know about the classic type of trading is that it’s typically tasking to start trading. Why? The reason for this difficulty is because you’ll probably face so many hurdles before you commence trading. You have to deal with several paper works, as well as some expenses that are associated with it.
You should also know that after all these efforts you’ve put into commencing trade, profit-making is on a long-term basis. Moreover, you would have to set an initial capital aside. Examples of these types of starting capital are margin and trading fees.
In classical trading, you have to exert efforts on news analysis, business models, as well as political-economic trends in different parts of the world.
On the other hand, trading in cryptocurrency is more straightforward. With just $100 worth of crypto, you can start trading. As an entrepreneur, this allows you to enjoy the benefit of the crypto market, which is much more volatile than the traditional trading market.
Crypto trading is easier, Maxim Bederov
Because the classic trading is a highly regulated and monitored industry, you’ll need to sort some paperwork to secure your exchange. Besides, companies that offer regular trading services will request vital information from you. Sometimes, these companies may ask for a declaration of professional investor status; this may cost you extra cash and waste your time. For instance, a fiat stock exchange will ask you to sign an agreement with a broker-dealer firm to commence trading.
The crypto market is nearly unregulated. Although several countries have a few requirements, there are no globally-acceptable regulations, or rules. But recent pressure from financial regulators across the world could change this. For now, it is easier to commence trading in crypto. If you’re a small scale entrepreneur, crypto trading might just work to your benefit. In crypto trading, you can start gaining with less capital. Moreover, the paperwork process is more straightforward and therefore it saves time. And time is money, as you know.
I can tell you that this simplicity and ease have opened crypto trading to several risks. There have been quite a handful of cases as regards hacking and loss of funds.
The difference in trading sessions and operation
Another difference between these two kinds of trading is their availability. Only a few platforms for the traditional type of trading are available for 24 hours. So, most times, transactions have to occur within a specific timeframe. You also find it hard to trade during holidays and weekends.
If you are an entrepreneur or you love investing, crypto trade immense availability may work for you. Why? Cryptocurrency exchanges are available 24/7. Exchanges also react to global trends. So, you need to have a strong online presence to keep up with opportunities.
Conclusio, by Maxim Bederov
Both ways of investing have their pros and cons. Depending on which type of investor you are, you will have already decided on one side. Whatever it is, it is wonderful that you are looking at your finances and striving for knowledge to optimize them. Keep it up!