If you're unsure whether to invest in cryptocurrency or mutual funds, this blog post is for you. We compare the two investments and evaluate their risks, returns, and long-term potential to help you determine which one is the better option.

1. Cryptocurrency vs Mutual Funds: Where Should You
Invest?
Blog / By Imperial Money / May 29, 2021 / bitcoin, cryptocurrency, cryptocurrency vs mutual fund, dogecoin,
Finance, Investment, lumpsum, Mutual Fund, SIP, What is better to Invest?, Where Should You Invest?
Cryptocurrency vs Mutual Funds: What is
better to Invest?
Everything in the world, whether man-made or natural, has its value and keeps fluctuating constantly. The
concept of money was first used thousands of years ago as something to trade for. Only in 600 B.C, the
concept of currency in the form of coins and paper was invested. The concept of money or currency has
evolved into a much complex system since then. This interests people to invest in things whose value tends to
go up over time to grow their money. Over time, different ways of investments have been developed and are
still constantly on their way to invention.
This blog specifically revolves around two types of investments, namely – Mutual funds and cryptocurrency
which is the most talked-about investment vehicle.
What is a mutual fund? And how does it work?
Most of us know about mutual funds or have at least heard of them. Well, a mutual fund is a financial vehicle
that consists of a pool of money from various investors which goes in securities like stocks, bonds, money
market & nowadays in real estate as well.
Mutual funds are managed by professional fund managers whose aim is to make capital out of investments
made by people. Any gain or loss is proportionally shared by each shareholder of the mutual fund.
What is cryptocurrency? And how does it work?
“Crypto has a chance of becoming Digital Gold,” says Former US Treasury Secretary. Cryptocurrency or crypto is a
digital currency used in peer-to-peer electronic cash systems over the internet. Cryptocurrencies are
decentralized i.e. there is no centralized authority to govern them, and they work based on a blockchain
system.
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2. Bitcoin is one of the most famous types of crypto. Bitcoin along with many others is limited in number unlike
other types of currencies which can be increased if needed. Cryptocurrency is discovered or mined by solving
complex mathematical problems. Some other famous cryptocurrencies are – Ethereum, Litecoin, Bitcoin Cash,
etc.
The question arises – which of them is better for investment?
Parameters Mutual funds Cryptocurrency
Source The existing assets and their
values.
Most cryptocurrencies are finite in number and are
yet to be mined completely.
Risk Comparatively low risk High risk due to uncertainty and volatility.
Returns 5% – 15 % annually Fluctuates annually from 1318% in 2017 to -72.6% in
2018 to 87.2% in 2019 to 302% in 2020
Additional costs Very Low Transactional Fees Very low transactional fees
Medium of
investment
Through financial advisors or
online platforms.
Online through any crypto trading application or
crypto exchanges,
Quantity The potential is not finite and is
measured by the value of
assets.
Most cryptocurrencies are finite in number and are
yet to be mined completely.
Legalities It is legal and regulated by SEBI
in India.
Using crypto is legal but it is not recognized by any
Central government across the globe.
So then, who wins?
Well…the answer is no one. Both of them are not always compatible as an investment option. Where should
one invest depends on various factors but the most important one is “Risk appetite”. As mentioned in the
above table, both of them have differing returns and thus way different risks associated with them.
Apart from its uncertainty, crypto faces one major issue that is – since it’s decentralized it is very difficult for it
to become a form of currency. On the other hand, big corporates like Apple and Amazon are in favor of crypto
as a currency, and that is why it has now become a tricky issue and constantly appears in financial news.
Now few more data for your understanding. Only 100 people across the globe are holding 13% of BITCOIN
with their individual capacity. 40% holding of all BITCOIN globally holding by 2500 unknown accounts. That is
how single trade by 1 account holder influence and generate very high of volatility.
We believe looking into the all parameters we have to choose sensible and realistic products and services
which suit our risk profile.
No matter where and how you choose to invest, it is quite understood that planning is the key. It is highly
recommended that you consult a financial distributor for your hard-earned money to safely grow for your
future needs.
Imperial Money Private Limited is one such firm that provides personalized financial services and wealth
creation activities. This organization is an expert in mutual fund distribution and systematic investment
products. Imperial money aims at sensible investment and customer satisfaction.
In conclusion with this analysis, there are always different ways to invest and grow your money. People need
to choose the right option for them keeping in mind their capacity and ability to cope up with the outcome.
HAPPY INVESTING!!!
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connection with the use of, or on the reliance of its product or related services. Unless otherwise specified, all returns, expense ratio, NAV, etc are historical and for illustrative purposes only. Future will
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