Before starting to invest in stocks or crypto, we need to know the regulatory agency, so the investment process becomes safer and more convincing. Stock investments are under the Capital Market and Financial Institution Supervisory Agency (BAPEPAM-LK) while crypto is under the supervision of the Commodity Futures Trading Supervisory Agency (BAPPEBTI). For stock and crypto prices, it is very influential on market sentiment, so that increases and decreases are commonplace. However, which is riskier between investing in stocks and crypto? No one! But both have their risks and flexibility! Let’s break it down.
Risk or Volatility
Although the increase and decrease in stock and crypto prices depend on the level of supply and demand, stocks are centralized or some institutions regulate the maximum and minimum restrictions on the increase and decrease in stock prices (Auto Rejection). The stock exchange system will reject incoming buy or sell orders automatically if the stock price has penetrated the upper or lower limits set by the Indonesia Stock Exchange. Auto rejection is implemented to ensure stock trading runs in fair conditions. In addition, stock transactions are supervised conventionally through banks.
While crypto transactions are recorded in blockchain technology transparently, like a ledger that records every transaction activity in a system that works in a decentralized, valid, and minimal error. This scheme raises the assessment that digital currency transactions are easier, safer, and more practical because there is no party acting as an intermediary such as a bank. No wonder there are no maximum and minimum limits on crypto prices.
Stock trading investors need to analyze the company’s financial statements and management such as debt, product types, and company growth to minimize risk. Meanwhile, crypto investors need to look at projects that will be or are being undertaken by a company through a whitepaper. Crypto investors can also see the validity of a company issuing coins through a platform like Etherscan.io. So investors don’t have to worry about the validity of the coins they want to invest in.
Many countries already use crypto as a legal tender. However, in Indonesia, there is no regulation regarding crypto as a means of payment for goods and services but as digital investment. Meanwhile, shares are still an investment, both in Indonesia and in other countries. Some rules apply in stock and crypto investments, one of which is a minimum purchase. In stock trading, the Indonesia Stock Exchange has set a minimum purchase of 100 shares or 1 lot. Otherwise, there’s no minimum purchase for crypto investment. Every crypto has different rules for this. You can find more information about creating a buy or sell order by company website or whitepaper.
The second rule regarding operational time. Stock trading activities also apply operating hours. Crypto trading activity has no operating hours. You can anywhere and every time!
Between stocks and cryptocurrencies, both have their own risk and analysis. Crypto and stocks can help investors grow wealth. Each option comes with its own set of risks. It’s important to do your research before diving in.
Make sure you have a high tolerance for risk, a well-diversified portfolio. Doing your research and choosing your investments carefully, it becomes easier to balance risk and reward.