Are There Differences Between Trading Crypto and Shares?

Trading Crypto and Shares
Differences between trading crypto and shares | cryptocurrency regulation + more.

Published by FrankNez Team.

When it comes to trading, there are a lot of different options out there.

You can trade stocks, commodities, forex, and even cryptocurrencies — also known as “crypto”.

So, which one should you choose?

Before you can make that decision, you should have in-depth knowledge of each asset class and the differences between trading them.

To help you begin, we will discuss the differences between trading crypto and shares in this article.

Let’s get down to it!


SEC crypto regulation

The first major difference between the two is the regulation.

When it comes to trading shares, there are a lot of different regulations that need to be followed.

These regulations are put in place by organizations like the Securities and Exchange Commission (SEC).

Cryptocurrency, on the other hand, is not as regulated.

While there are some regulations in place, they are not as stringent as the ones for shares.

This lack of regulation can be seen as a good or bad thing depending on your perspective.

For some people, the lack of regulation is a good thing because it allows for more freedom when it comes to trading.

Others see it negatively because it could lead to more scams and fraud.

Exchanges and Market Access 

Another difference between the two is the exchanges that they are traded on.

When it comes to shares, they are usually traded on accredited stock exchanges like the New York Stock Exchange (NYSE) or the Nasdaq.

These exchanges strictly follow market timings.

For example, NYSE is open from Monday to Friday 9:30 am – 4:00 pm EST.  

On the other hand, cryptocurrencies are not traded on accredited exchanges. Instead, they are traded on crypto exchanges.

These exchanges are open 24 hours a day, seven days a week.

This difference is important to consider because it will affect when you can buy and sell your assets, which in crypto is literally anytime.

Some of the popular crypto exchanges are Binance, Coinbase, and the Independent Reserve.

Related: List of 4 Best Crypto Exchanges for Beginners


Shares represent an ownership stake in a company.

When you buy shares of a company, you become a shareholder. As a shareholder, you have certain rights.

These rights could include the right to vote on company decisions or the right to receive dividends.

On the other hand, purchasing cryptocurrencies does not necessarily represent an ownership stake in a company.

These are digital currencies without an intrinsic value.

That’s why their face value is subjective and often fluctuates.   

However, there are also some cryptocurrencies that do represent an ownership stake.

These are called “security tokens” and they function similarly to shares.

Some notable security tokens are Polymath and tZERO. 

So, when deciding to buy cryptocurrencies, keep in mind that they vary widely in terms of their intended use and what they represent.

Make sure you do your own research before you choose to trade in crypto. 

Market Volatility

Another key difference between the two is market volatility.

When it comes to shares, their prices are usually more stable because they are not as prone to sudden changes.

On the other hand, crypto prices can be very volatile because of a number of reasons. These include:

  • The lack of regulation
  • Presence of “whales” — traders who own a very large amount of crypto
  • Early stage of the market
  • A large amount of speculation

Due to this volatility, crypto prices can rise and fall very quickly. This could present both opportunities and risks to traders.

If you’re someone who likes to take risks, then trading cryptocurrencies might be a good option for you.

Because the higher the risks, the higher the rewards. 

However, if you’re someone who prefers stability, then you might want to stick to trading shares. 

One thing worth noting here is that this comparison between trading crypto and shares is not to say that one is better than the other.

The decision of whether to invest in crypto or shares really depends on your preferences as a trader.

Both have their own set of pros and cons, and it’s up to you to decide which one is right for you.

Here are some pros and cons of trading each asset.

Pros of trading crypto

  • The market is open 24/hours a day, seven days a week
  • Can be traded from anywhere in the world
  • Decentralized nature
  • A rapidly growing number of digital coins

Cons of trading cryptocurrencies

  • Highly volatile
  • Cybersecurity risk
  • Prone to scams and fraud
  • The lack of regulation could be seen as a con by some
  • Most cryptos don’t have an intrinsic value

Pros of trading shares

  • More stable prices
  • Accredited exchanges offer more protection against fraud
  • Better regulation 

Cons of trading shares

  • Market timings are limited
  • You might need to be an accredited investor to trade on some exchanges
  • Low potential for extremely high gains

Now that you know the key differences between trading crypto and shares, it’s time to make a decision.

Choose wisely and happy trading!

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Related: How to Invest in Bitcoin Cryptocurrency for Beginners

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