Though buying up cryptocurrency is a remarkably similar process to trading stocks, even the most novice of traders know that you can’t find crypto on the traditional stock market. Yet as crypto grows in popularity, it seems its absence from the stock market undermines its validity as a worthwhile investment. What gives?

The Key Differences

Understanding why currencies like Bitcoin aren’t on the stock market requires a rudimentary knowledge of both the stock market and crypto.

Stock markets like the NYSE or NASDAQ run on government-backed securities, something crypto will always inherently lack. Though this doesn’t permit stocks to be decentralized in the way crypto is, it certainly allows a certain measure of protections for stockholders.

Buying stocks means owning a percentage–however small–of a company. How the stock performs is directly related to how a company performs, and this can be predicted with relative precision based on any number of factors. Crypto, however, is driven by ownership: crypto is bought in the hopes that more people will want to buy it in the future, for a higher price than it was paid for. Cryptocurrencies aren’t enterprises that provide products or services to people; it’s a self-contained machine that relies on its internal workings.

As such, it doesn’t make sense for crypto to join the stock market, at least not for now. Though this is bad news for investors who hope to keep their portfolio in one place, that doesn’t mean trading crypto isn’t easy–or even less promising.

How Does Crypto Compare?

Of course, as the saying goes: different strokes for different folks. It will take a bit of research to see whether traditional stock-trading or crypto is the way to go, though a bit of a varied portfolio is always encouraged.

Ultimately, with promising ventures such as Metaverse on the horizon that are positioned to rely heavily on currencies such as Ethereum, crypto is projected to potentially become one of the most successful trading tools on the market today. For those who are more future-oriented and who don’t mind taking leaps, crypto could definitely be one of the best options for starry-eyed investors.

Staying Vigilant

Regardless of the outcome, investors should exercise caution when it comes to trying to exploit loopholes. Quite recently, a bitcoin-adjacent fund launched on the NYSE under the ticker BITO, as a way of buying into crypto without actually buying it. It was the quickest ETF to reach $1 billion–but that doesn’t necessarily make it reliable. Seasoned stock-traders know that ballooning stocks are often precursors to plummeting value, and not everything listed on the stock exchange is a wise investment.

Ultimately, stock trading and buying crypto are worlds apart–and might stay that way for a while yet.