Stock Trading vs Crypto Trading – 31 Similarities & Differences

What are the similarities and differences between stock trading vs crypto trading? In this digital age, you will find a host of online marketplaces that belong to the new generation as well as a series of mobile trading apps.

These apps and marketplaces make it easier for people to invest in and trade with digital assets. As a result, there are a growing number of people who have taken interest in trading stocks and crypto coins.

Given the current situation, investing in assets in both digital and traditional forms is not an act that is restricted to the wealthy anymore.

In fact, it is an act that a wider sect of people is willing to take part in with an intention to create more wealth. Check out Forex vs Crypto Trading.

Quite naturally it raises an obvious question in the minds of the ignorant investors: how does the process of stock trading compare with that of crypto trading?

This article will answer that question in the best way possible and enlighten you with the main similarities and differences between these two particular options to make an investment in the financial sector.

For your additional knowledge and information, the article also covers a few potential and primary issues related to these specific forms of trading that you should also be well aware of to ensure a better trading result.

Stock Trading vs Crypto Trading: The Similarities

Stock Trading vs Crypto Trading

Though the process involved in both trading stocks and cryptocurrencies have a lot of similarities, both these also have an equal number of fundamental differences. Here are the similarities.

1. Digital Exchange

Both crypto and stock trading involve digital exchanges. All you have to do in order to trade is log on to any brokerage account of your choice or use a mobile application simply.

The online trading platforms will allow you to do everything right, from placing your order to buying and selling your assets.

2. Trading Experience

Most of the crypto trading exchanges are also designed in the same way as the stock trading platforms to resemble them in layouts, the process of placing trades and order books.

This means that if you are accustomed to stock trading, you can easily start crypto trading using these digital platforms and have a similar experience.

3. Basic Trading Order

Whether you are into crypto trading or traditional stock trading, you will have access to similar basic trading order types. This includes the limits, the markets, as well as the stop-loss orders.

4. Order Types

It is required to get familiarized with the order types whether you are into crypto trading or stock trading.

With respect to the above, a market order for both crypto and stock trading is the command where you buy or sell an asset at the highest price available in the market.

A limit order, on the other hand, is the command to buy or sell the assets at a particular price set beforehand.

And finally, a stop-loss order is that which helps in preventing incurring excessive losses in a stock or crypto trade. The ‘stop’ and ‘loss’ prices are specific and an asset is sold as the ‘loss’ is triggered when the ‘stop’ price is reached.

5. Spot and Options Trading

Stock trading exchanges as well as crypto trading exchanges both will offer spot trading and options trading. In the spot trading option, you can settle and deliver financial commodities and instruments in a public financial market.

On the other hand, options trading are specific contracts that provide the traders with the right to buy or sell an amount of an original asset at a preset price at or before the expiry of the contract.

6. Liquidity Issue

If you are into stock trading, there may be issues with liquidity when you deal with micro-cap companies in particular or deal with penny stocks Over the Counter.

While crypto trading, you may encounter issues due to low liquidity as well, especially when you trade with crypto coins and tokens with low caps.

The same is applicable when you trade on smaller crypto trading platforms. However, these issues are a lot more pronounced and common in the world of crypto trading.

7. Volatility Issue

Considering the volatility aspect, both stocks and cryptocurrencies can decrease or increase in value. This means that in crypto trading as well as in stock trading there is a certain amount of risks entailed in both.

However, the prices of crypto coins are extremely volatile and notoriously dynamic. These are influenced mainly by the speculative nature of cryptocurrencies and investments.

This means that you will have much difficulty in having a consistent and clear monetary value while trading with the crypto coins.

In that case, traders usually scare off or look out for arbitrage opportunities across different crypto exchanges to profit from the volatility in crypto price.

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8. Topology of Networks

Several types of research and analysis results using different algorithms, spanning trees and graphs show that the topology of the networks involved in crypto trading is not different from the topology of networks involved in stock trading.

This is derived from the data of stocks available on NASDAQ.

9. Node and Edge Degree Distributions

Technically speaking, the node degree distributions in both stock trading as well as in crypto trading are pretty much similar. This is in accordance with the fact that both these specific types of economies follow a power law, a hypothesis that determines the success of a trade made.

However, when it comes to edge degree distributions of crypto trading over stock trading, though these are not vitally different, more data is required for a proper and precise analysis.

10. Time Series

Irrespective of the time to trade cryptocurrencies and stocks, in the pretext of comparing the two, it is found that there is no notable difference in the time series of these two economies.

In fact, analysis results show that the crypto assets used for trading have a distinct correlation when compared to the stocks of NASDAQ. The dissimilarities, if any, within the node distributions between the two are very negligible.

11. Connection

Several analytical results also show that when it comes to crypto and stock trading, the assets that have a high capitalization and value and are used during the trade seems to be connected densely with each other. These are more commonly and widely traded.

12. Price determination

Whether you are into crypto trading or stock trading, the prices of the commodities involved in both the forms of trades are usually determined by two specific market forces namely, the supply and demand.

13. Knowledge of market

You will need to have adequate and precise knowledge about the market whether you are into crypto trading or stock trading. Such knowledge will help you to trade more conveniently and efficiently.

14. Ease

Both crypto trading and stock trading are very easy to execute since both are done online now.

If only you have a proper plan in place, you will find trading crypto of stocks quite simple and make profits even if you are a beginner in either of these two fields.

Stock Trading vs Crypto Trading: The Differences

It is important that you know not only the similarities but also the differences between stock trading and crypto trading. Here they are.

15. Age Factor

Stock trading is an age-old process of buying and selling financial instruments and commodities over a trading platform and therefore you will see more people involved in stock trading.

On the other hand, crypto trading is a comparatively new concept. People are still unaware of these digital assets and therefore the number of investors and traders involved in the crypto market is significantly small as compared with the stock markets.

16. Features and Options

While trading your stocks on any given trading platform, you can expect to have a lot of diverse options, features, and benefits. This means that you can choose from a much wider range according to your trading needs.

In contrast, you will not get all the options on all crypto exchange platforms. And, if some of these exchanges do, the range of it as well as other financial derivatives will be comparatively much smaller as compared to stock trading. However, things are changing pretty fast in the crypto scene.

17. Ownership

While trading stocks and cryptocurrencies, one of the most significant differences lies in the ownership of the assets traded.

When you trade stocks on a stock market, you get a portion of ownership in the company. This ownership offers you the legal rights to vote and receive a portion of the profit earned by the company, known as dividends.

On the other hand, trading cryptocurrencies do not offer you such ownership and instead vary in terms of the use cases of them as well as what these coins intend to represent.

18. Design

In stock trading, you will deal with financial instruments and commodities that are specifically designed to offer you equity in the company.

This means that you are a part of that company and the degree of it will be determined easily by the number of shares or stocks of the company you hold.

On the other hand, crypto trading involves dealing with coins that are specifically designed to be used within a specific ecosystem enabled by blockchain technology.

However, if you choose specific crypto coins to trade that are designed to mimic stocks you may gain a specific equity stake in the company that issues them. This is offered over and above the other programmable traits of the coins.

19. Array

Typically, if you consider the array of assets offered, you will see that in stock trading the range of choice is relatively small which is issued by different companies from different industries.

In contrast, in crypto trading, you will get a much wider array of assets to choose from and it is ever expanding rapidly. This is primarily due to the ownership and design implications which typically vary from one project to another.

20. Research Requirements  

While crypto trading you should research thoroughly about every crypto coin that you want to trade with.

This is important because apart from the stable coins most of the crypto coins fluctuate notably and quickly in terms of value even though these coins are not designed to specifically serve as monetary units for making investments.

In comparison, the research requirements in stock trading are not as intensive as crypto trading since the value of the financial instrument and commodities usually do not fluctuate as drastically as the crypto assets within a short period of time.

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21. Accessibility to Markets

When you are into stock trading, your accessibility to the market will be restricted because you will have to start and end a trade within the specific business hours of the stock exchanges. These time frames can be different for different countries which you should be well aware of.

On the other hand, crypto trading can be done at any point in time of the day since the crypto trading markets are open 24/7 and even on holidays.

This means that you will find it much easier to take a new position while crypto trading. You will also be able to enter or exit from the market whenever you want irrespective of wherever you are in the world.

22. Trading Initiation

In order to start stock trading, you will need to invest some time and effort beforehand. This is required to do the paperwork (a lot of it) and to get a reliable broker as well as wait for the approval to come by for buying and selling the financial instruments.

On the other hand, the process is pretty shorter and quicker to start crypto trading. You simply need to sign up with a crypto trading platform and verify your account.

As for the deposits needed to be made as per the rules of the crypto exchanges, you can do it quickly either by using your credit card or through a wire transfer.

23. Limits in Issuance

While issuing shares and stocks for trading, there are some limits imposed on the issuance of new shares and stocks by the publicly traded companies. They must follow the local rules as well as their internal regulations.

On the other hand, there are no such rules in issuing crypto coins for trading because it entirely depends on the internal policies of the issuing company.

Moreover, these companies can also set hard caps on the supply of the crypto coins in much more provable and enforceable ways.

24. Trading Pairs

While trading stocks, you can use fiat currencies for purchasing or selling your desired assets. Typically, you do not have to go through the hassles of creating a specific trading pair.

On the contrary, trading cryptocurrencies involves using trading pairs. This is the process where two specific crypto coins can be traded for one another.

Ideally, Bitcoin and Ether are the two most commonly traded crypto coins. It is for this reason crypto trading pairs involve one of these two types of crypto coins.

If you want to trade two Altcoins, you will first have to exchange one for BTC and then trade it with the crypto coin you want.

25. Use of Fiat Currencies  

While trading crypto coins over an exchange, you may not have the ability to make a deposit or withdraw fiat currency depending on the specific exchange you have chosen to trade with. Also, it may not allow buying crypto assets using fiat currencies as well.

In comparison, stock trading will not have such limitations because most of the stock brokerages offer fiat on-ramp and off-ramps. This facilitates depositing, withdrawing, and purchasing of financial assets.

26. Legality and Transparency

Stock trading is more transparent and the legality factor is also more pronounced. This is because all of the publicly traded companies must compulsorily abide by the laws, rules, and regulations to maintain a certain level of transparency.

They need to provide financial updates quarterly, hold shareholder meetings on a regular basis, and update investors through official means regarding the past as well as the future performance expected by the company.

In the crypto world, crypto trading is not so transparent since the companies issuing the coins generally do not have to abide by a similar level of transparency and regulatory requirements as the publicly traded companies.

However, those companies that intend to raise funds through an STO or Security Token Offering may have to follow specific reporting requirements.

27. Performance Assessment

While indulging in crypto trading, it may not be easy for a trader to assess the performance of a particular crypto project accurately. Therefore, they usually make a trade without knowing for sure whether or not the particular project is actually worthy enough to focus on.

However, a few specific crypto projects try to be as transparent as possible through open governance and by providing regular updates through the user community.

However, stock trading is not as difficult and is in fact much result-driven since the traders know exactly how a particular financial instrument is performing and is supposed to perform in the near and distant future.

The financial reports and regular updates provided by the companies help them in this matter a great deal.

28. Potential Rewards

Just as the risks are comparatively low in stock trading, the potential rewards of it are also quite low, especially if you look at this aspect from the short-term perspective.

On the other hand, in spite of the high amount of risks involved in crypto trading along with a few notable ambiguities in comparison to stock trading, it is the higher potential rewards that attract more and more people towards it since it outweighs the inherent challenges.

29. Interdependencies

While comparing crypto trading with stock trading, it is noticed through several graphs and charts that financial assets used in stock trading are significantly interdependent with the strong economic factors related to a specific sector.

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This likeness is depicted by the cluster of stocks on the graphs that are created on the basis of the NASDAQ data.

In contrast, in the crypto economy, no such interdependencies are noticed which makes crypto trading significantly different from stock trading.

30. Insurance

In stock trading, when a trader buys a specific stock from a broker, it usually comes with a particular insurance plan in place.

For example, when you perform a stock trade in the US exchanges, the asset will come with SIPC and FDIC coverage of up to $500,000. This means that if your investment is lost, you will get government reimbursement.

On the other hand, in crypto trading, there are no such insurance covers offered.

However, there are only a few crypto exchanges that offer cash insurance up to a certain limit but there is no SIP or other insurance securities offered because crypto trading is not recognized by the government in the true sense.

31. Open Positions

Since you cannot trade your stocks on weekends and holidays, it is better that you do not leave any open positions.

Since there will be no effect of the real-life events that may happen during that period, it will be harder to plan your stock trading venture. Instead, you should wait till the market makes corrections when it re-opens and you start trading your stocks.

Crypto trading is devoid of such issues and you can leave your positions open even on weekends since the market never closes.

This will ensure that you make the most out of the reactions of the crypto market to any event, provided you are online not to miss out on any important news and potential opportunities.

Which is Better – Stock Trading vs Crypto Trading?

Choosing between crypto trading and stock trading is a matter of personal preferences and what you exactly want to achieve from your venture.

It also depends on the underlying factors, pros, and cons. It is all about the level of risks you are willing to take.

For some traders, stock trading would be the first and most favored option. This is good for those people who are very confident about the price and market movements and can leverage it while buying and selling stocks.

Also, the time value is on their side in this case. It is a fact that while you are trading crypto coins in the market, you stand a real risk of 100% of losing whatever you put into it.

This is in spite of the fact that mining sets a floor price and the psychological barriers affect the level of risks involved.

On the other hand, in stock trading, the real systematic risks of putting your money range between 50 to 80%, until and unless you have an insanely non-diversified portfolio.

Typically, research and analysis results show that the stock markets, especially in the US, do not crash beyond that point.

And, if you are investing in a long-term project of 40+ years or so, the prices will always go up.

Another significant issue with crypto trading is the absence of regulation. This results in price manipulation which, in contrast, is quite fair and equitable in a stock market.

Also, the crypto market has a huge concentration of coin ownership which is unknown or anonymous which means that there isn’t adequate protection for the investors.

Apart from the fact that SEC does not approve crypto ETFs due to the price manipulation factor, there is also the lack of insurance in crypto trading that makes it less favored than stock trading.

The traders and investors operating in a stock market in the US typically have SIPC or government insurance to protect them from unfavorable conditions.

All these factors give stock trading a significant edge over crypto trading where theft of digital stock is quite possible and common leading to a loss of the entire capital invested in crypto assets.

However, crypto trading is the best way to go if you like day trading. This is because in stock trading there are specific rules imposed which are called PDT or Pattern Day Trading.

This rule limits a trader who has a balance of less than 25K in the account to make four day trades within a trading period of 5 days.

If you are into trading forex or futures, you can get around PDT but the market moves in these cases will be significantly low as compared to crypto trading, unless you use higher leverage in forex.

Therefore, to sum up, the advantage of trading stocks is that you deal with the intrinsic value and the losses are not very harsh.

And, the advantages of crypto trading include the ability to trade 24/7 with no PDT rules and much larger moves. However, it is highly speculative. Now, the choice is entirely yours.


Now that you have a solid knowledge about the similarities and differences between crypto trading and stock trading, it will help you to deal with one or both with more confidence as a trader and expect to have an exceptional end result.