Understanding the difference between crypto trading and traditional trading

By Bala | Bala | 11 Mar 2023

Crypto trading is very popular these days and people try to understand more about crypto trading only by understanding and comparing it with traditional trading. The biggest advantage that we have with crypto market trading is that it is available for 24 hours and people can trade it at any time. The biggest advantage that we have with traditional market trading is that people cannot trade at any time but at least they know the basic concepts of trading and can easily get onboarded.

Asset types matters

There is a huge difference in what is being traded here. That can be said as one of the biggest examples here. Crypto trading usually involves trading fungible tokens and non-fungible tokens and direct cryptocurrencies. But in traditional trading, not just shares but people can invest in bonds, and even commodities one of the biggest things where people usually trade. Soon there can be multiple categories in crypto trading as well but yeah it can take some time. Right now apart from cryptocurrencies like BTC and ETH, there are also NFT tradings happening on some of the exchanges.



Government regulations

It is still unclear how governments are going to regulate this completely. There have been a few regulations and some details on how this can happen in the future but most likely it is hard to regulate crypto. When compared with crypto, the regular market is regulated very well by the government and they have strict rules on what happens on what and how much people should pay for the gains. Everything is centralized and under visibility.

Market hours

I already mentioned this at the start of the article. The market hours are not a criterion when it comes to crypto trading as the exchanges are online and are also available 24/7. This is not the case with traditional markets because they are centralized and they have some fixed market timings.


Compared to the crypto markets the traditional markets have high liquidity. There are so many exchanges in the crypto markets and people are involved globally. In spite of that people can easily affect liquidity if there is a huge buy or sell order. This is not the case in the traditional market. There is always good liquidity available. Even if there is a problem with the liquidity, the exchanges take an action and suspect a stock from being further traded to not affect the price by so much.



Volatile nature

When it comes to trading crypto markets are more volatile in nature. The main reason is that price fluctuations are heavy in the crypto markets. It is easy to change the price of crypto dramatically compared to the traditional market. If someone decides to reduce the price of a coin from 10$ to 1$ today, they can literally do it if they have enough funds with them. But that is not the case with traditional markets.


It is mandatory to have KYC done in traditional trading and in most cases, the government would know what exactly you are doing in the traditional market and how much you are buying and selling, and all the information. This is not the case in the crypto markets. You can create anonymous crypto wallets or exchange accounts and start trading. Though there is a restriction on how much you can withdraw with a non-KYC option, it is not a big deal to dodge that. People might do it multiple times and the problem is solved.


As I already mentioned in one of the previous paragraphs, the crypto exchanges permit anonymity and thus people can stay decentralized and some exchanges are also decentralized in nature. In the case of traditional exchanges, they are fully controlled by the government and the government knows what exactly you are doing you have to pay taxes properly, or in some cases, they might deduct tax from you by themselves.

We can keep going on and on with the differences between both types of trading. I would say that traditional trading is a bit lower risk than crypto trading. Sometimes if we don't choose the right exchange we might as well lose our money. In traditional trading, that is not the case and we are protected by the government.

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