Is Cryptocurrency Gambling Or Investing

When a new cryptocurrency user jumps into the market and tries to get rich quick by investing in projects they know little about, this is basically gambling. It’s comparable to investing in penny stocks, which in the investment world is also regarded as gambling. When Cryptocurrency is a Legitimate Investment. This feature is called volatility. Volatility is a finance term that describes how much the price of a certain asset varies from time to time. High volatility is generally also equal to high risk. So when you invest in cryptocurrency, the risk is quite high. But does a high risk equal gambling? In our view, it depends on which type of gambling. Trading in cryptocurrency is like gambling. Because it’s exchanged peer to peer without any tie to regulatory standards, there’s no pattern to the rise and fall of its value. You can’t predict changes or calculate returns like you can with growth stock mutual funds. But you should be wary investing more than 10% or even 5%. Understand that the most basic reality is that cryptocurrency isn't even an investment! Much like investing in gold and silver, it doesn't pay interest or dividends. To the degree that cryptocurrency will be a good investment all depends entirely upon its price increasing significantly. The worlds of cryptocurrency investing and gambling need not be mutually exclusive. You can find ways of keeping both ideas in play. If it comes down to a one or the other choice, however, it all depends on where you feel most comfortable risking these funds.

Very Few money making avenues have such a thin and clouded line as the difference between gambling and investing. And with Cryptocurrencies, that line just got even more clouded and thinner.

According to Investopedia Gambling is defined as a game of chance where you choose to trust your gut that buys placing money in a particular game you will receive a sizable monitory winning at the end of the game. People love it because it gives you an adrenaline rush while placing considerable returns in your pocket.

Investing could be defined as gambling, and no one would tell the difference because the definition above perfectly describes it. But economists believe that investing is placing your money in a growing asset in the aim of gaining a profit as a return. Did you notice that in gambling the returns are winning and in investing the returns is profits?

Investing

Similarities between gambling and investing

Is cryptocurrency gambling or investing stocks
  • In both cases, there is a sizable level of risk and reward
  • You are advised to use only your excess money to make a bet or investment
  • You are encouraged to know when to cash out
  • There is a high level of uncertainty
  • There is both a game of chance
  • They can both make you very wealthy

Is Cryptocurrency Gambling Or Investing Stocks

Differences between investing and gambling

  • In gambling, there is a house involved. But in investing there is no house, although the market itself has been defined as the house
  • In investing through numbers you can predict the outcome of the investment, but in gambling, it is only a game of chance
  • An investment is categorized as an asset while a gambling win is not
  • An investment portfolio can go a process of analysis while a gamble cannot
Is Cryptocurrency Gambling Or Investing

This shows even more clearly that gambling and investing can be tricky to differentiate but that both are at the same time at completely different ends of the spectrum.

As an individual how not to gamble in the stock market

The reason gambling and investing is so closely defined is because many people treat the stock market as a gamble. But this shouldn’t be the case at all!

Is Cryptocurrency Gambling Or InvestingIs Cryptocurrency Gambling Or Investing

Invest in what you think will grow

Is Cryptocurrency Gambling Or Investing Money

It’s all about growth with investing. Look at an asset that you believe has a good chance of growth

Time

Is Cryptocurrency Gambling Or Investing Good

For new investors, time is a good thing to factor in while investing. Though investing in an asset or a company that has been in the market sometime will likely get you lower returns there is less risk.

Is Cryptocurrency Gambling Or Investing Better

Look for powerful incentives

Some companies have great incentives when you invest in them such as a hefty dividend. When making an investment look at the incentives that the company offers.

Investing and gambling both give you a great way to make money. But suffice both being highly uncertain, at least investing is somewhat predictable.