Stocks vs Crypto — Which Will Make You RICH in 2022?

So there’s one question that I get asked above everything else, “Between crypto and stocks, which one is the best investment?” This has always been a very hotly debated topic between investors.

I’m gonna be putting stocks and crypto head to head by running through the advantages and disadvantages of both.

We’re gonna cover the volatility, the risk of fraud, if it has long-term potential, and how easy it is for a new investor to get involved, and start making some money. Later on, I’m also gonna be sharing with you how you can pick up some free crypto and stock, so stay tuned for that. Crypto and stocks are actually very different.

With stocks, you’re investing in real companies that have to release information about their financials, such as what they’re working on, where their money’s being spent, and how much profit they expect to make.

With crypto, you’re just buying code, and the value of the coin depends on what someone else is willing to pay for it. This is because there isn’t much information publicly available as with stocks, and it’s much harder to gauge future values.

Now let’s consider volatility, or in other words, how much of a bumpy ride this is gonna be? The stock market’s been around for a long time. It was created in 1611 in Amsterdam. The first ever stock traded was the Dutch East India company. The company had three main missions: to trade, to explore, and to colonize the world.

This was certainly big business back in the day. I remember it well. Because the stock market’s been around for so long, experts have learned lots over the decades about how to spot and predict trends.

Although it’s not easy to predict the market, and I still believe time in the market is better than timing the market, there is no denying that some people are able to beat the system.

It goes without saying that people that day trade, or invest in penny stocks, will see a lot of volatility, more than someone who just holds a low cost index funds, like the S&P 500.

This is because this index fund allows you to invest in the top 500 companies in the USA in one easy investment, meaning that if one crashes, then the others will make up for it, leading to less movement in the price.

Some people might think this is boring, and I can see why. It’s volatility, and therefore, the ability to make lots of money fast. It’s certainly very exciting. But that’s what I really like about the stock market. There are investments that suit everyone’s individual risk tolerance and goals.

Cryptocurrency, on the other hand, was born out of the fire of the 2008 financial crisis. So we really don’t have a lot of history to look back on. This means that the price movements are highly unpredictable, as most of this is just happening for the first time.

Maybe, in the future, when we have more data to look back on, we’ll be better at predicting the trends, but at the moment, your guess is as good as mine.

There’s also a lot of pump-and-dumping in the crypto space. This means scammers can buy lots of a certain coin, then advertise it as a great investment online, pumping up the price, then all they have to do is sell, aka, dump the coin at the peak, and then it will start to crash, causing lots of people to lose money.

This is really because of two different things. Firstly, anyone is able to create their own coin with little approval, or even regulation. This is the complete opposite to stock.

Sometimes this can be great, because we’ve got some really good projects out there. But, of course, it can open up to scams as well. The second reason is the market cap, which is the collective value of the coins in circulation.

This is very small for a lot of new cryptocurrencies, therefore, it’s much easier for aggressive advertising to manipulate the value in the short term.

This is a bit like what the Wolf of Wall Street used to do with penny stocks and telephone marketing, but now in the 21st century. So crypto currency is clearly much more volatile than stocks, however, that doesn’t have to be a bad thing if you pick your investments carefully.

I sense it is a great opportunity to make a lot of money. I actually recently made a profit on my crypto investments, and I had much better returns than I would have expected from the stock market in a single month.

I also think an important part of any investment is how easy it is for a beginner to get started, because ultimately, if it’s too hard to invest, then most people aren’t gonna even bother. The stock market has historically been very hard to access, with only the rich benefiting from it.

I didn’t come from a wealthy family, which meant if I wanted to invest, I had to find a stockbroker that would handle my trades for me, and it was a very drawn out process of phone calls.

However recently, this has changed! With apps such as Public, in the USA, you’re able to invest and learn at the same time. These types of apps also allow you to buy fractions of a share, which is actually a groundbreaking concept.

For example, if you wanted to invest in Apple, you wouldn’t have to buy one full share of over $100, you can start by investing in as little as $1.

Cryptocurrency also used to be very hard to access in the beginning. You’ll often hear people wishing they bought Bitcoin in the early years. I know I do! However, it was almost impossible to buy, as the websites that people use today didn’t exist.

And the ones that did were really untrustworthy, such as Mt.Gox, which started as a trading card game site, and quickly became responsible for over 70% of all Bitcoin transactions worldwide between 2013 and ‘14.

But it all ended in bankruptcy because they didn’t have the necessary safety measures in place, which left it open to hackers and lawsuits.

Recently, Coinbase, one of the biggest apps for buying Bitcoin, has gone public, which means it’s on the stock market, and I’ve actually invested in it.

This is a huge step for cryptocurrency, as it legitimizes the entire industry. And it was actually one of the biggest IPOs in history. And I’ve personally been using it for just under a year, and I find it so easy to buy crypto, and then just transfer it into my private wallet.

This is a great way to get an instant 10% return. Whenever I consider an investment, I always look at the long-term potential. Many stock market experts recommend holding stocks for the long term.

This is because it is well-known that over time the US stock market, as a whole, has increased in value. Let’s say you invested $10,000 in an S&P 500 index fund from 1980 to 2018.

If you kept your money in the market the entire time, you would now have $708,143. However, if you got scared, and, for some reason, you sold off your investments, and you missed just the five best days of trading, you’d only have $458,476.

And missing the 10 best days would of wiped you down to $341,484. This shows that, although the stock market may dip in the short term, it always seems to have the ability to recover, given enough time.

When I’m talking long-term invest investing, I’m thinking 10 years plus. Medium term, three to five years. And short term can be as little as one day, and I think I’ve got that left.

I’ve always thought of my investments like paying a bill. Every month I send my money off, and completely forget about it. This way, I’ve never had to touch my investments, and I’ve not missed the best trading days.

But long-term potential cryptocurrency is not as certain. It all depends if it’s embraced by the mainstream, which does seem to be happening. Cryptocurrencies have a lot to offer us, and I’ve often talked about Bitcoin, and how lots of investors see it as a store of value, such as gold.

This is because the supply is limited to 21 million coins, which, in theory means, the more Bitcoin is bought, the less is sold, and the supply will shrink, and the demand will increase, therefore, driving up the price.

Ethereum is the second biggest cryptocurrency. It’s aiming to create a global computing platform, which allows people to launch apps, which aren’t controlled by a single company.

They are also pioneering smart contracts, which automatically fulfill the terms, which means there is no need for someone to oversee the process. I know that this may sound a bit complicated, but trust me, this has the potential to disrupt so many industries, especially real estate and banking.

Just imagine buying a house, and agreeing the price with the owner without lawyers and real estate agents being involved, the savings would be huge! In my opinion, cryptocurrency is the future. It just makes sense. Everything seems to be going digital. So why not our money as well?

I’m also not keen on how our money is being printed at the whim of our politicians who don’t seem to be considering the long-term effects of having too much money in circulation, and the possible inflation that this will cause.

At the moment, this is all very speculative. However, if Bitcoin and Ethereum can achieve these aims, then long-term, investors will make some great returns.

It’s also important to mention there are lots of other crypto projects looking to compete with each other. So maybe the question isn’t if crypto will succeed, but what specific crypto will be successful?

I keep seeing articles about young investors being really interested in crypto, but neglecting the stock market, and the other way around for older investors.

Each has its pros and cons, and if I had to choose one, it’d be stocks. But the truth is, I don’t have to choose. So I’ve reserved 5% of my portfolio for crypto investments, which is 5% more than last year.

This has the added benefit of diversifying my asset classes, so I’m exposed to a little bit more risk, but also some explosive returns. This really doesn’t have to be an either or proposition.

You can invest in both, and the amount of risk you’re willing to take really just comes down to your age, and how long you’re able to invest for.

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