How similar are STOCK MARKETS and CRYPTOCURRENCIES?

Orthodox people seem to be averse to the cryptocurrency market but feel comfortable trading in the stock market since they are relatively unaware that both cryptocurrency market and stock markets are very similar in nature and functioning.

Yes, the cryptocurrency markets are presently volatile, however on the other hand they provide opportunities for very good returns if sound fundamentals and accurate intrinsic values are considered while making the investments.

Therefore www.tradescrypt.com believes that investment strategies in both cryptocurrency and stock markets will be similar provided there is a good understanding of the nature and business of the cryptocurrencies and hence they have been able to achieve good returns for the investors.

Some of these similarities between STOCK MARKET and CRYPTOCURRENCIES are listed below:

  • The value of both cryptocurrency and stocks are based on their business.
  • In both cases, the value is determined on supply and demand basis, that means it depends on how much people are willing to pay for a share.
  • Like stocks, cryptocurrencies can also be categorized into small cap (eg Voxels), mid cap (eg Ripple) and large cap (eg Ethereum and Bitcoins).
  • Similar to IPO’s in stock markets, cryptocurrencies offer a platform to technology companies/start-ups to raise capital through ICO.
  • Understanding company fundamental is important while investing in a stock, similarly understanding cryptocurrency fundamentals (such as technology, community etc) and their intrinsic value is very important to identify the multi-bagger cryptocurrencies of tomorrow.
  • A diversified investment is very important in the stock markets as well as in the cryptocurrency market to reduce risk and increase returns.
  • There are traders, speculators and medium / long term investors in stock markets, those are also present in the cryptocurrency market.
  • As understanding the company business is most important to invest in stock, similarly understanding cryptocurrency technology is the most important factor to multiply your returns by investing in them.

Eventually, only those who understand the market will succeed in the market.

With a team comprising of Techies, Engineers, Analysts, Entrepreneurs and Investment Banking professionals closely involved in the financial technology field, www.tradescrypt.com is able to understand the cryptocurrency market and is able to take a well-informed decision on the position investors should consider in the cryptocurrency market.

www.tradescrypt.com believes that by taking the right, reasonable and logical decisions, investors in the cryptocurrency market can multiply their wealth immensely.

Our View: Initial Coin Offering

  • Initial Coin Offering (ICO) are crowdfunding campaign for cryptocurrency start-ups.
  • Start-up developers establishes a currency platform so that a significant amount of initial coins are allocated thereby enabling those initial coins to be auctioned in order to raise capital.
  •  If the currency platform is successful, initial coins offered will rise in value allowing ICO investors an exit.
  • Some start-ups also offer guaranteed equity in the business for the ICO investors.
  • Ethereum is one of the prominent examples of an successful ICO. It was initially launched with a sale of 31,591 bitcoin (then around USD 18.5 million) in exchange for first 60 million ether tokens.
  • Since Ethereum, there were more than 10 more successful ICO’s on the Ethereum platform which includes Basic Attention Token tracking-free advertising on the Brave adblocking browser, MobileGo token used in a cryptocurrency-based video game marketplace, Bancor Network Token which backs a platform designed to make it simpler for developers to make and launch their own blockchain tokens.
  • Investing in any ICO should be considered only after understanding the technology / platform / currency and after start-up management / community background check, among other points.
  • Therefore, at this stage, when cryptocurrency valuation are volatile, an investor should not consider cryptocurrency as a short term gamble, but they have to consider cryptocurrencies as either:

a)  Medium to long term investment instrument whose valuation will increase with greater acceptance and when certain required regulations sets in.

b)  An opportunity to invest in sound start-ups based on solid technology through ICO’s.

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