For a long time, investments were largely managed on the stock market. All stocks and shares are traded on a centralized stock market. Traders are working throughout the day to buy and sell, but the way that we invest in stocks has changed a lot in recent years.
The biggest change has come in the form of stock trading apps and websites. You no longer need to call up and get somebody to make trades on your behalf. Stocks and shares are not just for people with lots of money either. Through trading apps like RobinHood, anybody can get involved in stock trading.
The other major disruptor is cryptocurrency. Stocks and shares are increasingly being dropped in favor of crypto by a lot of investors. The major difference between the way that these financial instruments are traded is that crypto doesn’t have a stock market that closes. Instead, people trade on a decentralized blockchain that is active 24/7. That means that you can make a trade whenever and wherever you like, as long as you have an internet connection. You can use sites like OKX to track the value of cryptocurrencies and make trades in an instant. This allows for a much more detailed and precise short-term trading strategy. For people in other countries, it also removes the issues with time differences that people find when trading on the stock market. It is for these reasons that many people prefer crypto.
So, does this mean that the stock market will become obsolete or change dramatically? What does the future of the stock market look like?
Will Crypto Replace The Stock Market?
The short answer to this question is no. The reason that crypto won’t replace the stock market altogether is that they are two different things. The stock market makes transactions in fiat currencies that are tied to banks and governments. Cryptocurrency, on the other hand, is a decentralized currency owned and operated by a group of individuals.
So, there are uses for both and we need a centralized stock market because economies around the globe are built on the back of it. But that doesn’t mean that the stock market won’t change because of the influence of crypto.
The Stock Market and Blockchain
Blockchain technology underpins cryptocurrency. A blockchain is an online ledger where transactions are recorded. The information is stored in a decentralized way on the individual computers of those that are involved in the blockchain. Information is updated and verified on a blockchain much faster than it is with traditional financial institutions. It is also far more secure because it can’t be altered by a third-party.
At the moment, all trades have to go through a middleman, which is why there is a delay. But on the blockchain, it will happen instantaneously. It will also be accessible around the globe with fewer fees to pay.
Nobody can tell for sure how the stock market will change in the future. But it’s very likely that it will adopt blockchain technology and incorporate the best elements of crypto.