Cryptocurrencies vs Stocks: What’s a Better Investment in 2020?

In the previous few years, but especially in the last 12 months or so, investors have been asking one central question: Should I invest in cryptocurrencies or in traditional stocks?

While this debate among some investors still appears to be going on, many experts agree that cryptocurrencies offer the volatility that leads to consistently unrivaled returns with very few downsides, especially when aided by external tools that analyze markets and trends to give investment advice that better secures successful investments. So why are cryptocurrencies so preferred to regular stocks?

Firstly, crypto’s main appeal is the relative volatility of the market. In no time, investors can double or even triple their investment, something that traditional stocks really do not have the ability to do. If you are successful in the stock market, you could make a 5-15% ROI. However, investing in Bitcoin exactly 12 months ago would yield approximately a 144% return. The numbers really don’t compete!

The general consensus among some inexperienced investors is that volatility is the same as unpredictability, making some investors shy away from cryptocurrency. This, however, is not the case. Using external tools that can analyze trends and predict future price increases and decreases greatly improves one’s odds of capitalizing on the benefits of a volatile market while keeping the potential downsides in check. Successful investors have been able to do just this.

“I’ve been through a lot of moments when other people thought Bitcoin was going to implode, and in those instances, I generally have seen through inaccurate coverage of it.” 

– Olaf Carlson-Wee, Founder and CEO of Polychain Capital

Secondly, unlike traditional stock trading, it’s very hard for an individual to recognize, analyze, and capitalize on trends in the greater stock market. This is not the case with cryptocurrencies, and crypto price increases and decreases are much more tied to one another, as the market hits peaks and valleys more or less with one another. This can be used as a big advantage for cryptocurrency traders, especially experienced ones who can effectively predict movements in the market, whereas stock traders tend to be somewhat at the whim of external and unpredictable forces. Even HODL-ing, as it has come to be known, can be a very effective cryptocurrency trading strategy if market trends are positive.

The cryptocurrency popularity boom in late 2017, followed by the eventual self-correction of early 2018 is focused on a lot by cryptocurrency skeptics, as they believe that more radical jumps and falls like those will happen. Experts, however, believe that that is not the case, and that removing that period altogether yields a strong upwards trend for crypto that had been well on its way for over a year. Algorithmic quant trader and founding member of RoninAi, Peter Borovykh, believes that this period proved that crypto is a smart investment.

“This was a crazy period for crypto. Even my taxi driver was asking me if I had any Bitcoin. Since the dust settled, we can now look back on this period as proof that the crypto market is much more stable than skeptics assume. It took sharp upward and downward turns, but overall continued on its upward trend. Crypto is much more of a long play than people think. I would advise people to invest in crypto, but more importantly that they do so smartly.”

– Peter Borovykh

One of these ways of investing smartly, Borovykh believes, is through external tools that analyze markets and predict future outcomes for clients. Using these tools, investors can see up to 3.0x growth when compared to the strategies (or guesswork) they are currently using.

All in all, investing in cryptocurrencies or stock in 2020 or anytime is required to carefully comprehend the market in current time. Cryptocurrency investment has an ROI upside that cannot be rivaled by traditional stock investment, and the downsides of investing in crypto that are argued by some can easily be mitigated if the time, effort, money, and proper risk management is put into ensuring investment success thanks to experience and easily accessible tools that make investing a breeze for those of all experience levels.