What is the difference between crypto and equities? 

Nature and investment objectives 

A share represents a unit of ownership in a company. When you hold shares, you become a co-owner, a shareholder in the issuing company. This means that you own part of the company’s property. As a shareholder, you have certain rights, such as the right to vote at general meetings to influence company decisions. You can also receive dividends, which are regular payments of company profits to shareholders. Investing in shares therefore allows you to participate in the company’s growth and, in some cases, to benefit from regular dividends. 

Crypto or digital assets, on the other hand, allow you to choose from a diverse range of applications and uses of blockchainA blockchain is a type of distributed ledger technology. It is a huge database formed by blocks,cryptographically linked to each other, containing information such as transactions. These blocks are addedfollowing technology. These digital assets allow investors to choose between several objectives, such as speculating on price growth, participating in innovative technological projects or diversifying their portfolio. Other common uses include ownership of digital works (NFTA Non-fungible Token is a unique token issued on a blockchain through a smart contract. It is different from acrypto asset because it can’t be reproduced, however, it is still), decentralised financing (DeFi« Decentralized Finance », peer to peer blockchain based financial services such as staking.), online gaming (P2E, Play to Earn) and tokenisation of assets (digital representation of physical assets such as real estate). Crypto-assets can therefore be a medium of exchangeExchange platform for crypto assets (Binance, Kraken…), a store of value or a utility tokenCan be considered as a digital coupon whose unicity can be mathematically proven and being tradable for assets, services, or goods. The concept of token isn’t actually from crypto ecosystem; (ownership of an asset or participation in a blockchain). 

Market and regulation 

Shares are traded on regulated stock markets with trading hours. Stock markets are subject to strict rules and standards set by the financial authorities in each country. These rules are designed to ensure transparency, fairness and investor protection. Equity transactions often involve intermediaries such as brokers and clearing houses, which are subject to specific regulations. 

Crypto-assets generally operate on decentralised networks (blockchain), eliminating the need for intermediaries such as financial institutions. The market is open to anyone with an internet connection and an electronic walletPrice variation of an asset on a given period. to store their cryptos, and is open 24 hours a day. Regulation of cryptos varies considerably from country to country. The MiCA (Markets in Crypto-Assets) regulation aims to establish a regulatory framework within the European Union to protect users. Because of their relatively new nature, crypto-currencies (crypto-assets or digital assets) are subject to ongoing monitoring and adaptation by the regulatory authorities as the market evolves. 

Risks and availability 

Equities can offer a more stable long-term return, although subject to stock market volatilityPrice variation of an asset on a given period.. Equities are influenced by the financial performance of companies and the economy. 

For cryptocurrency investors, the potential return can be high, but it is also associated with a higher level of risk. The volatility of the crypto market is much higher compared to that of equities. Changes can be very rapid, with fluctuations of several tens of percent in a matter of hours or even minutes. The crypto market relies heavily on speculation and investor perception. 

Any investment, whether in equities or cryptos, involves risk. Past performance is no guarantee of future results. It is essential to understand the risks associated with the markets before making any investment decisions. It is also advisable to consult a financial adviser before making any investment decisions to obtain personalised advice based on your situation and objectives. 

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