Bitcoin Forum

Hi all,

Is there any fundamental difference between stock trading and Bitcoin trading?

Do both markets behave in the same fundamental way or are there any significant differences in crypto?

Could you be an expert about stock trading and then do wwll on cryptos as well?

Best,

Sakurro

1. Stocks has far more liquidity than bitcoin and cryptocurrencies hence the cryptocurrency markets are highly more volatile.
2. Cryptocurrencies are mostly traded based on hype cycles.
3. Cryptocurrency markets are open 24/7, stock markets are open like 8 hours a day in weekdays and non-holidays.

Completely depends on what kind of trading you're doing.

• Stocks are used to measure equities. Ownership of it gives you a share in a business which has gone public, Bitcoin on the other hand functions as a currency with speculative value. There is no equity involved.

• Comparing Bitcoin and stocks directly, both are influenced by popular opinion, so the more attention and demand it gets, the more the price is likely to rise and vice versa. But they have fundamental differences as well.

• As mentioned by mk4, it depends on what you are trading and what type of trader you are; long or short term. Normally one would have to adapt to how cryptocurrency market works and how to correctly employ technical and fundamental analysis.

In the first place, I am not an expert but here's my opinion. As an individual person especially if you enter here
in cryptocurrency you should know to yourself if you are a day trader or long term holder. You must also know
the coins you like to trade in the platform and make sure you check them all well, just like that only.

Of course it can, the idea of trading on stocks or crypto has no difference when you are using technical analysis. Most likely you will used same indicator too. The thing is, there are more choices on crypto while stocks trading depend on you, if your country has many supported stocks but you can do global stock trading.

This is my concern about trading. On stocks there is a limited time for the day you can access the market usually business hours unlike crypto that has more time for us yo trade.

If you hold shares, you can expect to receive a portion of the profit that is proportional to the total number of securities. In addition, you can get a profit from changes in the exchange rate of shares. Holding bitcoin is somewhat similar to stocks. You can also earn passive income by placing it on a Deposit. And also get a profit from changes in its value on the exchange.

Both are unpredictable but when it comes to fundamentals then stock market is somewhat can really be anticipated unlike on crypto on which news can either had impact or just simply being ignored.

Volatility aspect then this is one of the difference.We cant compared them when it comes to intensity of volatility aspect this is why some of  forex/stocks traders did jump on crypto due to that kind of reason
but somehow when it comes to risk then crypto do have it more.

When you do have knowledge on stock trading then its an advantage since they are all just the same in talks of trading aspect.You do just able to tell the difference when it comes to volatility.

Stocks are less volatile but cryptos are highly volatile,so if someone who is an expert of stocks trading will really struggle here in cryptos.Technical analysis in the crypto trading is not much effective as in stocks. And while doing crypto trading we may not have enough data to find how the market cycle is going to be.

They are completely different worlds.  There are hardly fundamentals when it comes to cryptocurrencies.  Fundamentals are different in the regular stock market because these stocks are back by real life companies that are producing goods or services of some kind.  They are not just simply some digital currency.  You could certainly be an expert on both if you've spent the time learning the two.

If you're trading, the difference isn't much and if you have been trading stocks and you're an expert in it you will definitely understand how to trade cryptocurrency easily. When it comes to general differences and similarities, there are a few things that differentiates them all, but these differences have nothing to do with the strategies that are being used.

The number one difference is that cryptocurrency trading is easy to start compared to stock where you are required to have a particular amount of money before you will be able to start trading. In cryptocurrency trading, it doesn't have any limit, you can trade no matter the amount you have in your account. Apart from that, sessions are another difference, unlike cryptocurrency that can be traded any day and time, stocks have limited sessions.

I wouldn't say that. Hype cycles might be a good narrative for explaining BTC's long term price trajectory, but these cycles take place over years. They aren't really useful for trading.

Like virtually every other market, BTC spends the vast majority of the time trading inside a range, so scalping and swing trading techniques are just as applicable to BTC as they are to stocks.

TA is exactly the same in both markets. Fundamental analysis is quite different, however.

Sure, but that's with BTC specifically though(and maybe with ETH as it has decent liquidity). I was referring to the cryptocurrency markets in general; which consists of like 99.99¯% altcoins which are mostly hype and vaporware with little to no fundamentals.

Market volatility makes them different from each other. And with the hypes rises in Bitcoin trading, people are jumping on it.
But could we expect that BTC trading will me more profitable than stock trading? It only depends on how you manage your trade.

Theres is no such huge difference, if you are good in stock trading, you can also be good in crypto trading, and you can also apply the strategies you have from stock trading. Only you need to manage it carefully as we know volatility makes it way different.

If you are not a high-risk takers, better to choose and stick to stock trading but if you are willing to face into a very challenging trading experience, well, BTC trading is good for you.

I would also like to point the obvious, bitcoin market is still fairly young and as a result, it's really hard to used technical analysis as there are no patterns to rely from the past. And that is why it is so volatile as compare to stocks. And lest we forgot, crypto market is unregulated and decentralised, transactions happen anytime of the day regardless where you are in the world.

1.Of course they have.
   A. liquidity
   B. Legality/Validity
   C. The risk/Volatility
   D. Market Players and behavior

2.Mostly have a different way,which crypto is more wild than stock market,but lately Bitcoin seems tend to following how Stock market movement,hope BTC will get the own Way soon.

3. its same like can u knowing your girlfriend's sister attitude ? even if they are twins ? , give more time on crypto and u will know crypto well.

There are many existing threads about this topic
Here's some:
https://bitcointalk.org/index.php?topic=2661484.0
https://bitcointalk.org/index.php?topic=2186703.0
https://bitcointalk.org/index.php?topic=3227383.0
https://bitcointalk.org/index.php?topic=2984594.0
https://bitcointalk.org/index.php?topic=2091215.0

This is very possible depending on you on how you will manage to learn both. There are traders that switch between those two and doing well at it. But if you're just a starter, It's better to just focus on one.

All of those are good points, though I would point out that not all stocks have the same level of liquidity.  Blue chip stocks and ones that are included in the major indexes have very high liquidity, whereas OTC stocks have so little liquidity that you'd be crazy to buy a big position in any of them--kind of like some of the more obscure altcoins that have very low trading volume.

Point #3 is one of the coolest things about crypto markets IMO.  I participate in the stock market (though I wouldn't call myself a trader), and I really wish it were open 24/7 like crypto exchanges are.  Doubt that's ever going to happen, though.

One difference I'd mention is the fees.  Some online stock brokerages offer commission-free trading, which is very cool.  None of the crypto exchanges I know of do that, plus you usually have to pay to withdraw your coins in addition to the network fee to send the coins to the exchange in the first place.  Those costs can add up over time.

And the biggest difference between trading stocks and crypto is that the latter is far more volatile and IMO much more risky.  That aside, if you put your faith in technical analysis, you can apply it to both stocks and crypto.

The fundamental difference is that when you are buying a stock you are buying into that company, so you believe that the company you picked will be doing better in the future so that it is shares would go up, if the company doesn't do well that means the stock price will not do well neither.

So, it is not a decision based on other people, it is a bit about people buying and selling because let's be honest even if company does well people could still sell and drop the price but that would not change too much in the company value. On contrary to that bitcoin is something that is valued depending on what people think it is valued, if enough people thinks it is $20k, the price would go up, if enough people thinks it is $5k it would go down, so it is all up to people to decide on that.

How does that make hype cycles a driving force in trading? There are plenty of penny stocks out there with zero fundamental value. That doesn't mean hype cycles are driving their day-to-day price action. Very few technologies (let alone thousands of altcoins) have actually traveled through an identifiable hype cycle. https://en.wikipedia.org/wiki/Hype_cycle#Criticisms

Every long once in a while you have a new technology trigger like DeFi, but after the initial hype, all altcoin niches completely revert to a standard correlation to BTC. They spend years and years and years simply reacting to and following the BTCUSD market.

Thus I would say altcoins trade mostly based on their correlation to BTC. As for BTC, hype cycles might be a good explanation for its valuation in a long term sense (the jury is out) but they have nothing to do with trading, which is a short term endeavor.

There are many differences between stock trading and crypto trading. For instance, Stock market has fixed timings whereas crypto trading is available 24 x 7 x 365.
Stocks have more liquidity and are less volatile whereas crypto has less liquidity than stocks but are highly volatile.
Cryptocurrencies can be bought in decimals for example you can 0.0001 bitcoin too whereas for a particular stock you must buy at least 1 whole share.

Never said that hype cycles was the only factor that drive's their price action, hence why I said "Cryptocurrencies(in general) are mostly traded based on hype cycles." Because their companies or "developer teams" hyping them up with whatever cheesy marketing tactic or misleading partnership that they could manufacture is a huge factor in their price spikes.

any financial market has similarities but is different in nature. We can learn the same about indicators and they can apply to both but the volatility is always different. There is a rule that when participating in any game, you must understand the rules there, otherwise you will be eliminated. There are many traders in securities and forex participating in the crypto market who are losing a lot due to the high volatility of bitcoin. Each market has its own characteristics and we must recognize it if we do not want to lose money.

All have been mentioned earlier replies but I have something to add in here. First thing first here, crypto trading isn't to give any legal entitlement to the owner. Because since crypto is unregulated, legal rights weren't there. Not unlike stock market, traders have fully regulated they they pay their taxes.

There are too many factors to consider it's differences, I only state those basic pieces of information and also others are already mentioned above. Or for further information, I leave here a link that has a good article that worth it to read.

Stocks are much less volatile, while cryptocurrencies market are much more volatile. The stock market is much more mature than the crypto market. Since the stock market is a very mature market and there is a huge amount of liquidity, technical analysis is very effective in this market. On the other hand, the crypto market has not yet matured resulting in extreme volatility and much less liquidity in the crypto market. As a result, it is not possible to go too far by following the technical analysis.

I agree jumping from stock to crypto is easy especially when you are already aware of what stock trading is all about there have been some data that says people in stock trading are trying to trade on cryptocurrencies. I just don't know if the terms used in both of these are completely the same? or likely to be the same?

Don't know that much of stocks tho but I see the point of futility of the differences compare to the strats.

Without having a background in trading, a simple videos on the internet can teach you on how to trade cryptocurrencies. I even started from zero knowledge, then gradually I started trying on my own, it isn't that hard as I thought of it.

Stocks have limited session in trading? I didn't know this, is this what a centralized asset look like?

Stocks  are less volatile
Stocks/Forex does have much more trading volume or liquidity
Stocks market is regulated

Common differences between the two and when you do trade up on stocks for a while then you will surely feel the difference
when you do tend to switch up to crypto and also i do agree into those previous points that this market is really highly
reactive to hype and fuds.

There are many similarities between the stock market and the crypto market. Both can be termed as assets. Trading in both is very similar except the fact that the crypto market is highly volatile when compared to the stock market. Moreover, the prices of the stocks depends on how well the company is performing and how much profit its making.

Whereas in cryptos it is more like how many people are investing their money into the project which drives the price up. But, if we look at them side by side, basically both work on the mechanism of demand and supply. The stocks are limited and so are the crypto coins so greater the demand and lower the supply, greater is the market value.

Cryptocurrencies in many countries now have the same liquidity as the stock. Although in most of the countries, liquidity is still a problem for crypto holders.

Hype or speculative are not just new due to cryptocurrencies. Stocks and commodities are also facing such hype based rallies and panic based fall down markets. Even some of the company stocks in the market are based upon the hype and faking mechanism.

Forex markets are available all 24 hours and all days a week but may not have enough volume. Due to non-regulated (decentralization) nature, we are having crypto exchanges serving all the times. Moreover exchanges are independent entities whereas stocks are having different structure.

Whether you trade stocks or crypto assets, research is necessary evil in every aspect. Learn, research, carry out background check and then invest.

Both stock trading and Bitcoin trading have advantages and disadvantages, so it depends on us more suitable trading stocks or Bitcoin.
But I prefer Bitcoin trading because the price is volatile, in contrast to trading stocks because of more liquidity. For me the price of Bitcoin
is volatile, it's easier to make profits. Therefore even though the risk of Bitcoin trading is greater, I consider Bitcoin to be more profitable.

There is exteremely huge difference for Bitcoin and stocks.
I know some trader who are started to trade stocks but when they entered in cryptocurrency or Bitcoin, they have much low winning rate compare to their trading in stocks.
That's why I can say that trading with Bitcoin and stocks got some differences, maybe there are some part that got similarities.
So, if you are pro and owning in trading stocks, and when you trade Bitcoin/cryptocurrency, you will still do the same with stocks?

Stocks have more fundamentals than crypto where in fundamental analysis is more likely usable than technicals, trading stocks and cryptocurrencies have a lot of differences. We can trade cryptocurrencies 24/7 but in stocks there are only specific market hours in order for us to trade it. Stocks also can only trade weekdays and the stock market are close whenever there is holiday and also every weekends.  When it comes to technicals, there are no differences because both of them are volatile but stocks are more news driven where it can affect the price when there is certain disclosure while cryptocurrencies are not news driven.

Yes, but you must have high stock trading and crypto skills so you can trade both without any problem. But stock trading and crypto trading are different, and the lesson will not be the same as the crypto market is online 24/7 without stop. Stock trading will be more difficult to learn, as there are many indicators that you need to learn. The crypto market will be big than the stock as many project releases every month on the market, so people will have more chances to profit in the crypto market.

Answering your question of fundamental difference there is a complete fundamental difference when it comes to stocks and crypto. Both just can't be measured on the same base. First and foremost reason for this is that the companies always strive to increase wealth to shareholders therefore trying to stabilize and increase stock price by getting good results. While in cryptocurrency developers are least worried about it after listing. Even if they take some measures to stabilize price these methods never are organic and ethical.

Secondly coming to trading there are a few differences:
1. The 8 hour stock market vs 24 hour cryptocurrency market is a big difference. It's because in 8 hour you would get a lot of volatility together while same isn't the case with 24 hour markets. Moreover gap ups and gap downs are also I would say a limitation of stocks
2. FUD in cryptos is much higher than in stocks. Stocks being more regulated experience less FUD therefore lesser volatility so your stop losses won't hit pretty often
3. No doubt stocks can be manipulated too but cryptocurrency are more prone to manipulation by big traders.

Fundamental analysis is a major way to trade in stock market while crypto trading is more in technical analysis and because of volatility of crypto trading in small period of time many traders are failed to accomplish what supposed to be they want to earn.
The possibility of permanent loss of money are found in these two but unlike stock trading you can determine or clarify the situation why you did your money loss or maybe the hackers get your money since its regulated by SEC while crypto trading have no such guarantee that you can be able to get back your loss money.

There are some differences, the main one is that stocks tend to move inside a range for a very long time and they do not trend very well, as such a system that takes small profits on each trade seems the most effective, bitcoin moves in a way more similar to other commodities like gold, silver, coffee, corn and beans, as such there are times in which the market does not move at all but then it begins to go up very rapidly, so your best option is to have a system that stays in the market for the majority of the trend and tries to get as much profit as it can from it.

That basically is the most significant factor a lot of people use it for their advantage while a lot of traders feel under pressure because with high volatility comes higher risk and you must have some solid backup to cope with the loss in case the price goes down and even harder for leverage traders. There are times when you would need higher risk-appetite or you will have to sell your bitcoins in loss as some investors/traders sold their coins in March when the price dropped like a sack of cards.

But at the same time, high volatility means you can easily use it for your advantage too and get bigger profits.

Stock market has a high liquidity and in case of the cryptocurrency it depends on the coin. Also, the cryptocurrency is very volatile that can doom or boost your investment in just a short time. If you are good in trading stocks therefore you can do good in trading cryptocurrency since they are using the same fundamentals and techniques.

I'm not sure how this be good and efficient because crypto trading is having a big difference in the stock market trading. The volatility in crypto will outplay those trading fundamentals and strategies that we use in stock trading and yeah, it finds not really effective as it was.

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They are all pertaining to such risk but can't deny that BTC trading involves high-risk than stock trading. With that matter, those low risk-takers will never choose crypto trading rather than stick with the stock market.
Anyway, no matter what kind of trading you use but the result will ultimately depends on you and how you manage it. It is not the case that you choose hig-risk trading but it how you make an adjustment to its shift.

I think the biggest difference between the two is with stock trading you can overlap both technical and fundamental analysis when trading where in crypto trading only TA is present. What I mean about an overlap is you can used both analysis to make your price prediction more accurate as fundamental analysis is something good to be used if you are betting on a financially good performing stock. Crypto on the other hand only has TA and also news that can trigger FOMO and FUD which makes it harder for you to rely only on its chart.

Liquidity is not really all that troubling because considering in the stock world we are talking about a lot of stocks, there are some like bitcoin and there are some that is more volatile than bitcoin and there are more stable ones than bitcoin. Of course you are not going to see a lot of stocks that goes down 20% and up 50% in a month, but bitcoin can do it however that doesn't mean those stocks do not exists.

You have to think bitcoin like an individual stock and not the whole stock market, if you do that there is absolutely nothing that resembles it, but if you take it like an individual stock, you can find ones that are resembling each other and that is what matters when you are trying to compare it to something, if you don't do that you can't compare it to anything.

While you are correct but buying a portion of bitcoins does give you a share of the total bitcoins and while it doesn't give any legal entitlement it does give you shares basically what we all hold are shares of the total bitcoins, no?

You have to pay taxes on trading indeed, unless you want to evade tax and yeah you aren't forced to pay taxes but you must if you are trading legally. I guess stock trading is inclusive of taxes in my country but when you are making more profits out of stock trading then you need to pay income tax which must be another thing after the taxes for stocks and trading related.

You might have forgotten to link the article so please do, because it is always good to learn something new :) (I am sure that I have double checked).

Trading is a mutual for both the platform so we just think how we split crypto and Stock market in all time. But crypto trading is totally unbelievable for beginners. Stock level is always  predictable so we pic the two to three projects we make some profit. But Bitcoin different from all the altcoins. The current market is growing rapidly so those are interested to investment in BTC they makure huge regards on fupim

Maybe crypto trading will good for the beginners as they don't have to learn many complicated lessons than the stock trading. The beginners can try to learn the lessons about one or two indicators, and keep learning of that so they can understand the point of the lesson. I think if they can master the lesson, they can have a chance to make a profit because if they try stock, I am not sure if they only need to learn one or two lessons to understand the stock trading.

Trading is similar to gambling, you take higher risks and you get higher rewards that can be called as bitcoin trading while taking lesser risks but also lower profits that can be considered as stock markets.

I have never done stock trading because I always thought a lot of legal work is required to get that done but with bitcoins it seems very simple because I just see the prices of bitcoins and other alt-coins and all I have to do is buy at a particular price and then sell once the prices moves up. I heard stock trading requires a lot of legal work as you actually buy shares into a company and you basically own rights for the company as you gain more shares.

To: OP

- The type of purchase and sale currency: Fiat. Bitcoin. (obvious but ... must be said) consequently technology makes them intrinsically different.
- mmmh! regarding what? volatility are different, volume is different,
- Yes, but it may be that your strategies, knowledge, must be adapted.
It is as if you are an expert swimmer in Olympic pools. In crypto, it is open water, you have to practice.

GB.

Since I have only traded bitcoin I have not really thought about it but I think you are right, when it comes to stocks you can anticipate many of their movements before they actually happen, if you think there is going to be a significant increase in the profits being reported then you can take a position way before this information is revealed and take some easy profits as those that are not putting attention buy after the fact, it may seem too simple to actually work but I do not see why it would not.

Stock trading operates in regular days while BTC trading is operating 24/7. There’s a lot could happen in a whole day of trading in crypto trading. I guess if you’re good enough in crypto trading, you will be able to get more money. You can easily purchase tokens in cryto trading rather than stock trading. There a lot of process needed to accomplish to be a trader in stock trading while in crypto trading you can be quickly a trader.

I guess liquidity and the volatility.

Since there are a lot of people that trade their stocks, people can easily sell and buy these stocks unlike bitcoin where you can only get some certain options. Skme country don't even include bitcoin. Another thing is volatility, as we all know cryptocurrencies are usually so volatile unlike in stock.

They are also hugely affected by pandemic and other stuffs while Bitcoin is not that much affected by it.

Do not forget the legality as well. Most of the time when you are doing stock trading you are in way more harsher legality zone as well, when you are in crypto you could make it a bit more hush hush and stay anon as much as you can, not saying you will be successful but you can at least try that, when you are in stock world you are basically in governments and banks lap and they will take as much from you as possible.

You can't really get into stock world with 100 bucks and assume that you could make a decent profit, at least %5 of that will be gone between fee's anyway so you need to make more, and stock market is not as volatile so its going to be quite the challenge as well. I don't know the advantages of it but surely there must be some since people are doing it in trillions of dollars.

I think technical analysis is less effective on crypto markets than it is on stock and forex. The market structure of crypto markets is often completely erratic and no sense can be made from it (although people still try).

I'd stick to fundamental analysis if you plan to trade cryptos, it will steer you in the right direction for medium to long term picks.

That is odd because I think the opposite, fundamental analysis does not really work in this market as it does not make sense that a coin that everyone knows is a scam goes up in value dramatically while some decent projects never get the attention of the community, technical analysis works in this market, it is true that it is difficult to predict when a spike in the price will happen but once that happens it is easy to determine if what we are seeing is a fake movement or if it is the real deal.