Scared to Invest in Crypto? Here’s Why Stocks Could Be a Better Bet

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You may have an easier time vetting a stock than a given digital coin.


Key points

  • Cryptocurrency is a fairly new investment, and a speculative one at that.
  • You might take comfort in the fact that some stocks have been around for more than 100 years.
  • You may also have an easier time evaluating companies than evaluating digital coins.

More than 84 million people hold cryptocurrency, per U.S. News & World Report. So if you’ve been feeling the pressure to add crypto to your investment portfolio, that’s understandable. And if you’re afraid to do so, well, that’s understandable, too.

Although stocks are a risky-enough asset in their own right, crypto tends to be far more volatile. And so the value of your portfolio might swing even more wildly if you add crypto to your personal investment mix.

But volatility isn’t the only reason you may want to choose stocks over crypto. Rather, you may take some comfort in the fact that stocks can be much easier to research, and that they’ve been around a lot longer.

A fairly new investment

At this point, crypto has become so mainstream that it’s easy to forget how new it is. But actually, Bitcoin, the first form of crypto, was first launched in early 2009. That means that if crypto were a U.S. citizen, it wouldn’t even be old enough to vote.

By contrast, many of the companies whose stocks trade today have been around for over 100 years. Take Procter & Gamble, for example; it was founded all the way back in 1837. Similarly, Johnson & Johnson was founded in 1886.

Now obviously, there are plenty of newer companies you choose to invest your money in, too. The point, however, is that the oldest crypto is a mere teenager, so it’s hard to know how much staying power digital currency has. But it’s pretty fair to say that many of the companies that trade publicly today are not on the verge of disappearing, based on the fact that they’ve already proven their ability to last.

A matter of value

When you’re buying stocks to add to your brokerage account, it’s important to make sure they’re a solid bet. What you’ll generally want to look for is stocks that offer a lot of value, or good value for their share price. Similarly, you’ll want your stocks to have the potential to gain a lot of value in time. And there are different metrics you can use to see if a given stock is a good pick.

For one thing, you can look at earnings. Publicly traded companies have to disclose earnings so investors can see what they’re getting into. You can also take a look at a given company’s cash flow and debt to get a sense of how well it’s faring.

There are other metrics you can look at as well to see if a stock is worth the price it’s trading at, including earnings per share. With crypto, it’s hard to determine if a given currency is trading at a fair price and if it’s worth the price at hand. That’s because digital coins aren’t businesses — they’re an asset whose value largely hinges on what investors want to pay at that moment.

Go with your gut

Some people have enjoyed a lot of success with crypto. But if you feel that it’s too risky, there’s really no need to put your money into it. There are plenty of other assets you can load up on that could help you meet your financial goals, so there’s no sense in taking a risk on a newer, more speculative asset you just aren’t comfortable with.

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