While both stocks and cryptocurrencies are respectable investing options, their functions within a portfolio differ. They can greatly benefit your investment strategy, but there are significant distinctions in how they are purchased and sold. Some key characteristics of stocks and cryptocurrencies are:

1. Ownership
The buyer will normally need to open an account with a broker in order to purchase and hold shares. For the benefit of buyers, brokers trade and hold shares. Although newer businesses like Robinhood have simplified the procedure, their products aren't as reliable. Buyers must also provide personal information like residence and ID numbers like their NIN or International passport. An intermediary provides a certain amount of security. Whereas, for cryptocurrency, the supposed anonymity of encryption is one of its benefits. You don't have to know who is buying the cryptocurrency. A cryptocurrency owner stores their assets in a wallet or other type of storage device. The drawback of anonymity is that the owner is responsible for security.

The owner monitors the location of the crypto, and at the very least, he is required to remember the 16-character password. When cryptocurrency wallets are destroyed by hackers, owners have few legal options.

2. Exchanges
Shares are traded on authorised exchanges all over the world. It is made to manage enormous quantities of daily trading and to give stock buyers security, stability, and transparency. To safeguard buyers and sellers, exchanges are strictly controlled (details vary by jurisdiction).

The concept of cryptocurrency exchanges is new. There are numerous crypto exchanges, if not dozens. Coinbase and Binance are the two biggest. Some exchanges collaborate with third-party service providers to facilitate the seamless conversion of fiat money, such as the Naira & US dollar, into cryptocurrencies.

3. Volatility
As old as the stock market itself are sharp price fluctuations in stocks. Both positive and negative news can affect stock prices, driving them up or down. The stock market might plummet in a single day, as the terms "Black Friday" and "Black Monday" imply. Usually, there is a technological or economic justification (e.g., programmatic sale). Outright losses are rare, although investors can observe a fall in the value of their portfolio.

For crypto, the volatility of cryptocurrencies is one thing for which they are renowned. For instance, Ethereum began 2021 at about $730 and reached $4,080 in late May. It decreased to roughly $1,786 in July, and by late October, it had increased to $4,082, and currently, in October 2022, ETH sits at $1,321.

4. Regulation
The Securities and Exchange Commission (SEC) was founded in the United States to improve investor protection following the stock market crisis that precipitated the Great Depression in 1929. Information that could affect a company's stock price must be disclosed. A lot of information is available for investors and their financial advisors to use when making investment decisions.

In contrast, there is little regulation of cryptocurrencies, which is positive for certain cryptocurrency investors. The cryptocurrency market is open worldwide and is not governed by any one institution. In the event that there is an issue with their investment, crypto purchasers are not covered.

5. Strategic Complements
Stocks and cryptocurrencies are similar in some ways but differ greatly in others. An investment professional may utilise them in the same portfolio for a variety of reasons while being cognizant of each one's advantages and disadvantages.
Stocks offer better security. For most of the 20th century and the beginning of the 21st, they were the top option for generating money for both individuals and organisations.
A riskier investment is cryptocurrency. Although the profits could be substantial, the risks are substantial as well.
When combined, these enable you to maintain a portfolio balance between risk and return.

Bottomline
There is no either/or in investing. Having a mix of assets that balance riskier bets with others that are safer is advantageous. Investors are free to pick between equities and cryptocurrencies for the same reason. If you are at ease with your portfolio's level of risk, you can invest in both cryptocurrencies and stocks.

Despite the fact that several cryptocurrencies have seen price increases since their creation in recent years, investors should still be cautious before making any decisions and not simply invest because other traders are. You must realise: If you choose to invest in cryptocurrencies, think about how it fits your risk profile and financial requirements. Investors don't need to invest in cryptocurrency to make money; while some may prefer the stock market, others may like cryptocurrency; it’s all up to you.

If you want to learn more about how to invest in cryptocurrency and get the latest crypto news, visit our blog.

Investing in stocks is much safer