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Is it Better to Invest in Cryptocurrency or the Stock Market?

Should you invest in cryptocurrency or stick with more familiar methods like the stock exchanges? What are the potential risks and rewards you should be aware of? Where should you start?

Everyday Americans are asking these very questions as more and more headlines appear in the public discourse. The news is staggering in scope and the results are varied. From giant returns for individual investors to illegal activity and hackers stealing millions of assets, there seems to be a constant churn of news on the topic.

It is safe to say that in 2022, cryptocurrency has captured the imagination of the public with stories increasingly focusing on the growth of the cryptocurrencies as a valid investment strategy. In fact, they are already worth nearly $2 trillion and growing. Arguably, the percentage of fraud has decreased dramatically over time and more investor confidence has grown as safeguards have been developed.

Still, since cryptocurrencies first became notable less than a decade ago there is still much unknown to the average investor. Meanwhile, stock markets have a long history and most investors are well aware of the systems in place. But the fear of missing out is driving more and more individuals to reconsider their initial dismissal of cryptocurrency as a valid form of investment.

As a result, many have actually began to wonder about the best way to invest. This included Geoff Williams of MoneyGeek. He turned to noted economists and experts to get answers on investing in cryptocurrency.

ISEG Research Fellow Siyu Wang Shares Her Top Advice on whether to invest in cryptocurrency and the stock market

On March 18, 2021, Williams quoted Dr. Siyu Wang, Research Fellow of the Institute for the Study of Economic Growth (ISEG), as a behavioral economics expert. Specifically, Dr. Wang gave context and a key tip in the article “Should You Invest in Cryptocurrencies or the Stock Market?” in MoneyGeek. Ultimately, she recommends using cryptocurrency as an investment if you can be comfortable with the risk.


In order to determine how many retirement assets could be allocated in cryptocurrency, you need to consider the percentage of your total retirement income that you are comfortable with subjecting to investment risk. For many of us, the primary reason to invest retirement funds is to offset inflation. Inflation makes saving money in the bank an unattractive alternative because what we could buy for $100 in 1990 would cost $220 to purchase today.

One common practice to achieve the average market return with a low investment expenses and risk is investing in index funds, which picks a group of investments such as stocks or bonds that represent the market, if you have the stomach for it.

Once you invest the amount of money you will definitely need for retirement life into a low-risk fund, you can invest in cryptocurrency. Similar to the high risk involved in picking a specific stock, when investing in cryptocurrency, you want to make sure that you can stand both consequences, which range from a tremendous return to losing it all.

The amount of price volatility that cryptocurrencies currently exhibit implies that they are being used primarily as an investment, not as a digital currency for daily transactions to purchase goods and services. This creates risks for both the buyers and sellers of cryptocurrency transactions. If businesses anticipate future price volatility with crypto, they may seek to quickly sell it to minimize their risk and preserve their profits. This sort of behavior reduces the viability of cryptocurrencies as a medium of exchange and a store of value, as companies do not want to sit on large stores of a currency that may wildly swing in value.

Dr. Siyu Wang
Research Fellow

Read the whole article on investing in the stock market or cryptocurrency at MoneyGeek.