3 reasons why I fear crypto more than stocks

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When I first started investing in stocks, I was admittedly very nervous about it. While I did some research and knew a bit about how to choose stocks, I also knew that stock market crashes could happen out of the blue, and I didn’t like the idea of ​​wasting my hard-earned money.

I have since become more comfortable with buying stocks. And these days, I don’t stress if the value of my portfolio goes down, because I know that as long as I don’t actually liquidate investments at a loss, I won’t lose money.

But when it comes to cryptocurrency, I’m still extremely reluctant to add digital coins to my wallet. Here’s why crypto makes me a lot more nervous than stocks.

Image source: Getty Images.

1. It’s more volatile

Stock market values ​​can fall at any time on an individual basis or on a large scale. A given company with strong finances could have a failing product, and the boom – its stock price goes down.

The large market could also collapse overall. This is exactly what happened last March, when coronavirus fears plunged stock values.

But as volatile as the stock market is, the cryptocurrency market looks even more extreme. And I’m not sure I have the stomach for it.

2. It hasn’t been around that long

There are companies in my portfolio that have been around for over 100 years. But the same cannot be said for crypto.

Bitcoin (CRYPTO: BTC), which is widely regarded as the first cryptocurrency, was founded in 2009. Compare that to a business that’s been around eight times as long, and you don’t get the same level of convenience. Or at least I don’t.

3. It’s harder to research

Before putting money into a given action, I dive into the business behind it. I look at things like recent earnings and measures like earnings per share. I also look at what the company actually does and what gives it an edge over its competition to make sure it’s a good buy.

I find it difficult to research crypto because it is a completely different beast. Sure, I can see which currencies are more accepted as payment methods than others, but it’s not the same as being able to dig into a specific business.

A tough sell for me

I know a lot of people who are excited to diversify their investment portfolios with cryptocurrency. But frankly, I’m still nervous doing it. If I decide to buy cryptocurrency, it will be in a very limited quantity, and I will not consider it a long term investment because I have no idea how resistant it is.

Of course, there may come a time when I no longer fear crypto. After all, I was scared to buy stocks, and now I don’t even worry when my portfolio takes a hit. But for the moment, I am not there yet. And since I know that loading cryptocurrency will make me lose sleep, it’s something that just isn’t worth doing.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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