Crypto Exchange vs Stock Exchange

What are the differences between crypto exchange and stock exchange? Cryptocurrencies have been successful in creating a buzz in the financial markets since their emergence about a decade back.

It all started with Bitcoin and then was followed by a large variety of several other Altcoins.

Taking the world by storm, cryptocurrency has resulted in some heated discussion among investors on dealing with cryptocurrency markets as against dealing in the traditional stock markets.

Most of the investors argue that the crypto exchange and the stock market are two different fields having a vast difference between them while some argue otherwise.

It is true that there are quite a few similarities between the operation and functionalities of the crypto exchanges and stock exchanges as well as in the ways in which the investors can grow their wealth off both these exchanges.

Still, there are lots of differences between the two. Well, if you only know more about the crypto exchanges and stock exchanges you will be able to find out for yourself whether or not these two are virtually the same or different investment concepts.

If you have to make a choice between these two types of exchanges, with such understanding, it will be easy for you to go ahead with one of your choices.

This article will help you in that aspect by listing all the different aspects of the two for a better and more precise knowledge.

Crypto Exchange vs Stock Exchange – The Differences

Crypto Exchange vs Stock Exchange 

For all investors, having previous knowledge of the stock market is definitely helpful if they are looking to step into the crypto market.

This knowledge will prove to be pretty handy because these markets or exchanges both essentially feature the same concepts.

However, as the similarities between these two exchanges exist, there are also several notable differences between them that are quite necessary for an investor to take cognizance of.

Here, in this article, it is only the differences between the two that are highlighted for a more precise comparative study between the two exchanges. Here they are.


Typically, the stock exchanges have for long proven to be quite a significant means of investment. Mostly dealing with the shares of a company, private or public, these exchanges have been the first preferences of most of the investors all over the world.

In comparison, the crypto exchanges are relatively new. Moreover, cryptocurrencies including Bitcoin and all other Altcoins have been viewed essentially and conventionally as digital currencies.

However, even though the primary use of Bitcoin and other Altcoins is as a digital currency, it is simply not limited to that.

It is for this reason that Bitcoin, in particular, has proved to be one of the most viable alternative asset classes over the years for millions of people all over the globe, in spite of its extreme volatility.

Profit Margins

People usually invest their money to earn profits, though the chances of incurring losses cannot be negated completely, and it is the same in the case of making an investment in stocks or in cryptocurrencies.

However, when it comes to making profits or incurring losses, there seems to be a big gap that exists between the stock exchanges and crypto exchanges.

The margin of profit offered by the stock exchanges is quite low as compared to that offered by the crypto exchanges.

Wait Time

You will need a lot of patience in order to make some profit by investing in the stock market because in most cases the returns come in the long term.

The process of the stock exchanges is quite slow, often requiring the investors to wait for years to earn handsome returns.

On the other hand, with cryptocurrency trading, the case is entirely different. The volatile nature of the crypto assets may result in a significant price swing in a quick time.

The value of assets may rise notably resulting in a huge profit in a quick time. Therefore, the crypto exchanges are a much better and faster alternative to make a profit, though making losses are also quite common due to the extreme volatility of the crypto assets.


Another significant aspect of the difference between the crypto exchanges and stock exchanges is their reach.

Cryptocurrencies, as such with Bitcoin leading the way, has got a universal reach since it is accepted globally. As of now, more than 180 countries all over the world accept it.

On the other hand, stocks are usually traded in the country of origin or where these are incorporated.

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This limits their accessibility though there are a few particular stocks that are enlisted in several stock exchanges all over the world but these are only a handful.

Convenience and Cost factors

Since cryptocurrencies are globally accepted and the online crypto exchanges can be accessed from any place in the world and at any time, it provides a lot of convenience to the crypto investors and traders.

In addition to that, the blockchain technology involved in making cryptocurrency transactions is not only easy but also involves a much lower cost.

However, when it comes to investing in stocks, or any other traditional instruments, you should go through a lot of rules and regulations.

You will need formal accreditations since these stocks are restricted to specific stock exchanges and qualified institutional buyers. All these may cause a lot of inconvenience for a newcomer as well as attract considerably high trading fees.


While dealing with cryptocurrencies through a crypto exchange, everything is done online and digitally which reduces the time to make a transaction.

Moreover, the simple technology behind cryptocurrency and the minimal requirements of the crypto exchanges to allow one to trade and invest in crypto assets expedites the entire process.

However, in comparison, you will need to invest in or trade with stocks through a broker even if you are allowed to buy those stocks that are listed in several exchanges over the world.

This is a time consuming process since obtaining a broker account is not easy and needs time to go through a proper and strict KYC or Know Your Customer procedure.

You will also need to prove the authenticity of your funds along with their origins, your assets and income and others in order to start trading. All these slow down the process.

Hours of Operation

Another significant difference between the stock exchanges and the crypto exchanges, which also is a drawback of the former, is that the stock exchanges are usually open from 10 am to 4 pm, Monday to Friday.

This means that you will not be able to trade stocks beyond the working hours of the relevant stock exchange.

This also means that you will not be able to avail of the advantages due to the changes that may happen all over the world as well as in the stock markets beyond these times. You will see the effects of these changes only on the next day when the stock exchange opens.

On the other hand, the fact that the crypto exchanges are open 24/7 and for 356 days in a year, even on Christmas, gives the investors and traders an added edge.

They can trade and invest any time of the day and any day of the year according to their liking and convenience.


There is also a significant difference in the supply of assets in the stock and crypto exchanges or markets. Usually, in a crypto market, there is a cap imposed on the supply of Bitcoin and Altcoins.

In the case of Bitcoin, it is capped at 21 million. As soon as this cap is reached, mining of further coins will stop. The crypto industry also follows the process of halving and burning coins in order to regulate the supply of them.

This is quite important because it will directly influence the demand and price of a particular crypto coin. With the supply capped, the demand remains always over and above the supply making investing in crypto assets a sensible decision.

However, on the other hand, when it comes to the stock exchanges, there are no such limits in the supply of any of them. Any company is free to issue more stocks as and when required depending on the demand and supply ratio.

This gives the investors and traders on a stock exchange an opportunity to predict the price by simply looking at the supply and demand trends.

Risks Involved

The risks involved in trading on the stock exchanges are pretty low. The fact that the stocks are typically backed by the government makes it quite a safer platform.

Trading of stocks is usually heavily regulated and the Securities and Exchange Commission monitors all the public shares as well as the exchanges very closely.

These stock exchanges are large and mostly centralized and all available stocks are listed on the exchange. You can trade only the unlisted and penny stocks privately on these exchanges.

However, in comparison, trading on the crypto exchanges is quite risky not only because of the extremely volatile nature of the cryptocurrencies but also due to the fact that it belongs to the decentralized structure of the blockchain network.

This means that there is no central governance and no one to fall back on should there be any unwanted incidents happening while trading.

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In fact, there are hundreds and thousands of independent companies that run small exchanges where people trade their crypto assets among them as buyers and sellers directly.

Even a small tweet or comment on Reddit can swing the prices of crypto coins dramatically. It is for you to understand the risks involved in it.

Market Manipulation

In the crypto exchange market manipulation is a common phenomenon. These are done by the crypto ‘whales’ that hold the majority of the coins. This specific crypto community makes specific moves that alter the prices of the crypto coins.

By excessive buying or selling, these particular individuals or a group of individuals put forth the FUD or Fear, Uncertainty, and Doubt in motion at a given period in time.

This FUD phenomenon is actually a propaganda that is primarily aimed at reducing the prevailing prices of the crypto coins.

On the other hand, however, in the case of the stock exchanges, there are little or no incidents of market manipulations.

This is mainly due to the reason that the stocks, as well as the stock market, are pretty tightly regulated much unlike the crypto markets.


You can also differentiate the stock exchanges and crypto exchanges on the basis of trade fluidity. As said earlier, the stock exchanges charge a lot for each transaction in the form of taxes, brokerage charges, trading charges and more.

All these charges eat up a considerable chunk of the investment people make in the stock markets.

On the other hand, the crypto exchanges are a step up on this particular aspect as compared to the stock exchanges.

When you want to trade cryptocurrencies you simply have to find a legit exchange, get a digital wallet to yourself, and purchase the crypto assets.

Everything here is clean, transparent, quick, less expensive and irreversible, making crypto trading more fluid in nature and crypto exchanges more sought-after platforms.

Sources of Profits

When you use the stock exchanges, you can make profits from two particular sources. One, you can sell your holdings to another investor at a higher price than you paid for it to make capital gains.

Two, you can hold the shares and earn dividends on it provided the company offers dividends to their shareholders.

On the other hand, profits can be earned from the crypto exchanges via capital gains. This once again means selling your holdings to another investor to turn them into cash though a few utility tokens do offer a complex set of software solutions.

However, to date hardly any utility token has ever been able to make its software a marketable product.


The crypto market exchanges mainly remain unregulated and dealing with the unregulated asset class has led to a few scams and issues.

There has been a surge of crypto assets over time that the investors can explore but this comes at a cost.

Several reports suggest that almost one-third of the new crypto coins introduced to the market are scams and frauds in some way or the other since most are designed and released as either cash-grabs or customary pump-and-dump schemes.

Add to that, the investors are often bitten by the improper enforcement of the current regulations in the crypto market.

However, in comparison, such happenings are very rare in the stock market exchanges. This is because almost every product bought or sold over the stock exchanges is regulated and doing anything like these with such regulated attest is an act of felony.

Therefore, scams are very rarely found in the stock exchanges and market.

Which is Better – Crypto Exchange or Stock Exchange?

This is a tough question to answer.

Typically, the stock and crypto market exchanges are both subject to scrutiny but people all over the world are taking interest in both these exchanges of the finance world of late to interact with money on a global scale.

Ideally, the stock exchanges have played a significant role in the finance market and investments for a long time.

Over the years it has proved to be the backbone of companies that need to raise capital from the market for their functioning.

Not even a decade back it was probably unthinkable that a world without the stock exchanges may exist but things have changed now with the emergence of crypto exchanges and crypto assets.

It now seems that it just might be the case soon.

The crypto exchanges are surely looking too good to take over a significant portion of the investment market.

With each passing day, the investment volumes are getting much bigger making these exchanges the most favored ones among the investors and traders.

Therefore, it is required to know which among the two is suitable to you based on your financial needs and trading styles to keep up with the continually evolving finance world.

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Following the differences between these two exchanges you now know that the crypto exchanges are available to trade around the clock for seven days in a week.

Therefore, if you are looking for convenience it is these exchanges you should go for, especially if you are unable to devote a specific amount of time every day.

Crypto exchanges are also good to go for if you are looking to get a trading account fast and for making transactions that are easy and quick to make.

It is for the global accessibility of cryptocurrencies as well as the crypto exchanges that you will find more traders on these exchanges than on a stock exchange.

Another good reason to go for the crypto exchanges is that you can use the products bought and sold here to make payments for goods and service your purchase, which is a significant advantage of it over the stock exchanges.

If you own stocks that no one is willing to buy you cannot sell them and get the cash to pay for any good or service.

In comparison, the demand for crypto coins is always there since the supply is regulated, especially in the case of Bitcoin, and therefore it is easy to buy and sell crypto assets.

It can be safely said that with all the benefits offered by the crypto market exchanges, these are well poised to become much more forceful than they already are.

And, looking at the wide and rapid acceptance of cryptocurrencies as well as the changing scenario in the financial perspective and climate, it will soon eclipse fiat currencies and thereby the stock exchanges in the near and foreseeable future.

However, there are some similarities between these two exchanges as well that you should know.

In terms of market capture dynamics, it may seem to you that the stock exchanges and crypto exchanges are different.

There are large numbers of companies listed in the stock exchanges all over the world while the crypto assets add up to a few tens of thousands.

However, if you look deeper into this diversity you will find that almost 55% to 70% of the entire number of cryptocurrencies is tied up with Bitcoin.

On the other hand, the stock market exchanges are also not dominated by one particular stock.

According to reports, almost 20% of the entire S&P 500 stocks involve the FAANG stocks which belong to Facebook, Apple, Amazon, Netflix and Google.

Now, which one of the two exchanges should you choose for your trading and investment objectives?

Well, the crypto market exchanges seem to be all the more exciting since it deals with a wide range of boom-and-bust crypto assets.

Just like it has done to others, it may also attract you promising a huge amount of return in a very short time.

If that is the case, then make sure that you invest in only those assets that belong to the most speculative segment to increase your crypto investment portfolio.

Also, consider the amount of money that you can afford to lose while investing.

However, the stock exchanges are safer bets because they deal with the assets that are linked to a company and the returns you can expect from them are related to the performance and growth of the underlying company.

This actually grounds the price of the stocks. They are still volatile but surely not to the same degree as the crypto assets.

You may still need some help while making your choice and for that matter do not hesitate to take help from an expert financial advisor.

You will get enough help from these advisors to balance the wild ride which stocks or crypto exchanges are bound to provide.

This will help you to attain your financial goals easily.


It is vital for a new investor to know the difference between the crypto exchanges and stock exchanges in order to trade and invest properly. This article has surely helped you to enhance your knowledge and help in making the right choice.