As an investment, should I trade stock or cryptocurrencies?
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The simple answer is: invest in stock. Don’t even think twice about it!
Trading vs investing
But first things first. You’re mentioning both trading and investing. These are two very different approaches. Trading assumes an active involvement to buy and sell securities (often over a relatively short term period of time), while investing often means buying and holding something for an extended period in the hopes it will appreciate in value.
If you don’t have experience with either trading or investing, you will have to study up and learn how to trade/invest. It’s not easy. Trading is definitely the hardest of the two.
On cryptocurrencies
Don’t get me wrong: I love cryptocurrencies. I have bitcoins stashed away for when they might take off. But I don’t see them as a safe investment. They’re about as high-risk as you can get, and I’m prepared to lose them all in case they suddenly go to 0.
Cryptocurrencies are high-risk, unregulated, untested digital assets. Crypto exchanges go bust about every once a month. You lose your money if they do, since there’s no regulatory body like the SEC of CFTC when things go wrong. I say untested even though I read the bitcoin source code and know the math works out, but people thought https was secure too - until some critical bugs (in OpenSSL) were found :-)
My point being: it’s relatively new technology and while it holds much promise, we’re still in early stages. If you’re investing $80.000, you want an asset class that is a bit safer than that.
On stocks
Even when they go down in value, stocks are usually a much safer option. Depending on your age and your risk profile, you might want to look at different asset classes. There’s stocks, government bonds, ETFs, mutual funds, stock baskets, etc. A good place to start looking at what exactly would suit you is the Bogleheads wiki.
The trade-off
This is absolutely not investment advice, but how I might approach it: how about you buy 10 bitcoins, stash them away safely (not on an exchange - see cold storage!) and put the rest in stocks (or bonds, ETF’s, etc). That way, most of your money is in a safe asset class, and if bitcoins would ever take off and increase in value 10-fold, you at least have a few of them to have an excellent return on investment :-)
Don’t hesitate to contact me if you have any other questions on trading!
Cheers,
Felix
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Marcie Terman
Marcie Terman, An private investor and avid reader of investor literature since 1980.
Answered Nov 30, 2016
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With a SMALL portion of your overall portfolio you can do both at the same time on First Global Credit - Home .
On this site you can use your bitcoins as collateral margin to trade (or invest if you take the long view) over 200 markets in the US and UK from Apple, Google, Tesla or Betfair to gold, oil, soybeans etc. You can buy or short the markets. Benefit from dividends while retaining ownership of your bitcoins (which are used to secure your trades.) If you make poor trades your bitcoins are at risk. But if you do well you get the appreciation value of the BTC plus the value of your trading profits as well.
Actual positions are taken on the exchange on your behalf.
Also. Bitcoin deposits of over 10 BTC earn 2% interest per year.
But as bitcoins are a volatile asset class to begin with, they are only to be invested in with money you could easily tolerate losing in its entirety.
Good luck