Bitcoin and other cryptocurrencies are similar to stocks. Yet, they are different to equities, since cryptocurrencies do not participate in the capital structure of the company.
Bitcoin actually provides value currently as the infrastructure for the cryptocurrencies market. Bitcoin's public acceptance, Bitcoin being the most famous cryptocurrency, is pivotal in establishing cryptocurrencies as a new investment class.
Bitcoin and other cryptocurrencies are much more volatile than common stocks. Cryptocurrencies, other than Bitcoin and Ethereum, are essentially a token on a company's project. If a company is successful in its projects, the cryptocurrency issued by the company will be successful.
A difference to common stocks is that cryptocurrencies are not an ownership on the company which implicitly presupposes that the particular company will not necessarily support in full the cryptocurrency it has issued. Microsoft, for example, had many hardware and software projects through the years which never produced success. If Microsoft had issued several cryptocurrencies in connection with particular projects which failed, those particular Microsoft's hypothetical cryptocurrencies' prices will have sunk to zero. And yet Microsoft's common stock is soaring to new highs giving Microsoft a 2.25 trillion USD market capitalization.
In short, cryptocurrencies investments bear high risks, but also high potential rewards. Vigilance is key.
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