EXPLAINER: 5 Key Differences Between Crypto Trading and Stock Trading

Most of today’s trading takes place via digital channels, where users have access to various financial markets. Channels include digital exchanges, brokerage accounts, mobile apps, and other online applications.

As such, the digital experience between trading cryptocurrency and stocks is usually similar. Crypto or stock platforms usually have the same design, liquidity mechanisms based on order book and trading options.

The platforms provide access to the three order types: market, limit and stop:

  • a market demand An order to buy or sell an asset as quickly as possible at (or close to) the current bid (for a sell order) or ask price (for a buy order). A market order guarantees execution of the order but not the price.
  • a Limited demand Designed to buy or sell an asset at a specified price – or better if possible. A buy limit order can be executed at the specified price or lower, and a sell limit order can be executed at the specified price or higher
  • a stop order (or stop loss) It is used to mitigate excessive losses. It is an order to buy or sell a stock once the price of the security reaches a specified price, known as the stop price. When the stop price is reached, the stop order becomes a market order

For cryptocurrencies, most decentralized exchanges are only serving market orders at the moment, although this is expected to improve as DeFi grows. Central exchanges offer the full range.

But there are some important differences in trading stocks or cryptocurrencies:


Shares usually confer ownership like shares to their owners. This is not always the case with encryption. Many crypto assets are utility tokens that are intended to be used within an ecosystem that supports the blockchain and do not represent a legal stake in the institution that issued them.

Many cryptocurrencies that do not have provable use cases associated with actual business operations are meant to serve as a store of value, such as Bitcoin (BTC) or stablecoins. These goods can be thought of as digital goods, like gold, but they do not represent any stake in a company or its operations.

Finally, while many digital assets do not represent a legal stake in the issuing institution, certain types of crypto-security tokens are actually designed to function like stocks. It represents an ownership interest in an issuing company as well as other programmable characteristics.

In many jurisdictions, these tokens are subject to the same regulatory requirements as securities.


See also: Cryptocurrency short-term contracts are the most profitable and straightforward trading tool – says the team behind TurboXBT


Market access

The main difference between crypto and stocks is the period in which users can access the market in the day. Stock trading is generally limited to business hours, for example between 9:30 a.m. and 4:30 later in the day.

However, the cryptocurrency markets never close, even on holidays. This makes it easier for people to take new positions and enter or exit the market whenever they want, no matter where they live.

Version limits

Publicly traded companies that issue shares may have the option to issue new shares in accordance with the company’s bylaws and any relevant local laws.

On the other hand, the total supply of cryptocurrency is subject to the internal policies of the issuing institution or the instructions contained in its blockchain protocol. The supply of cryptocurrency usually does not depend on laws or policies.

Moreover, crypto projects can easily and transparently set fixed limits on the total supply of cryptocurrencies in a demonstrable and immutable manner.

Use of trading pairs

While stocks are bought and sold in fiat currencies, buying and selling cryptocurrencies may involve the use of trading pairs where two cryptocurrencies can be directly exchanged for each other.

Since Bitcoin (BTC) and Ether (ETH) are two of the most popular cryptocurrencies, most trading pairs include one of these crypto assets.

As such, if you want to trade one altcoin for another, you will likely need to first exchange the altcoin you want to trade with something more popular, like BTC, and then you can exchange BTC for your desired altcoin.

Automated Market Makers (AMMs) offered by several DEXs, including Uniswap and PanCakeSwap, make it easy to automatically execute trades using the crypto pairs they offer thus simplifying the process.


As of now, cryptocurrency trading is not subject to the same regulatory scrutiny as stock trading which has been around for much longer.

Companies that issue shares are legally obligated to provide transparency about activities. This happens through:

  • Quarterly financial updates
  • Shareholder Meetings
  • Annual Reports

Equity regulators include:

  • Securities and Exchange Commission (SEC)
  • Federal Deposit Insurance Corporation (FDIC)
  • Financial Industry Regulatory Authority (FINRA)

Despite these differences, the growth of cryptocurrencies is leading to the convergence of the traditional and the new. This is evidenced by the increased participation of institutional investors in cryptocurrencies.


Suggestions for readingAn introductory guide to quantitative/computational trading in crypto


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