Cryptocurrency vs Mutual Funds: Where Should You Invest?
What is a mutual fund? And how does it work?
Most of us know about mutual funds or have at least heard of them. Well, a mutual fund is a financial vehicle that consists of a pool of money from various investors which goes in securities like stocks, bonds, money market & nowadays in real estate as well.
Mutual funds are managed by professional fund managers whose aim is to make capital out of investments made by people.
What is cryptocurrency?
Cryptocurrency or crypto is a digital currency used in peer-to-peer electronic cash systems over the internet.
Cryptocurrency is discovered or mined by solving complex mathematical problems. Some other famous cryptocurrencies are – Ethereum, Litecoin, Bitcoin Cash, etc.
The question arises – which of them is better for investment?
Source The existing assets and their values. Most cryptocurrencies are finite in number and are yet to be mined completely.
Risk Comparatively low risk High risk due to uncertainty and volatility.
Returns 5% – 15 % annually Fluctuates annually from 1318% in 2017 to -72.6% in 2018 to 87.2% in 2019 to 302% in 2020
Additional costs Very Low Transactional Fees Very low transactional fees
Medium of investment Through financial advisors or online platforms. Online through any crypto trading application or crypto exchanges,
Quantity The potential is not finite and is measured by the value of assets. Most cryptocurrencies are finite in number and are yet to be mined completely.
Legalities It is legal and regulated by SEBI in India. Using crypto is legal but it is not recognized by any Central government across the globe.
So then, who wins?
Well…the answer is no one. Both of them are not always compatible as an investment option. Where should one invest depends on various factors but the most important one is "Risk appetite".
Now few more data for your understanding. Only 100 people across the globe are holding 13% of BITCOIN with their individual capacity. 40% holding of all BITCOIN globally holding by 2500 unknown accounts.
Imperial Money Private Limited (https://www.imperialfin.com/
In conclusion with this analysis, there are always different ways to invest and grow your money. People need to choose the right option for them keeping in mind their capacity and ability to cope up with the outcome.
Imperial Money Pvt. Ltd.