The post Is investing in classic stocks always safer than defi? Not exactly appeared on BitcoinEthereumNews.com.

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. In 2011, a 9.1 magnitude earthquake struck the seafloor of Japan, causing a massively destructive tsunami. In the following days, Japan’s Nikkei stock market fell by 6.2%, reflecting the market’s reaction to an unprecedented disaster.  Thirteen years later, cryptocurrencies, which have surged in popularity, face criticism for their extreme short-term fluctuations, often perceived as even more volatile than traditional stocks. While this volatility can appeal to some risk-tolerant investors seeking high rewards, it represents a red flag for more loss-averse, conservative traders. However, as outlined above, the situation with the Nikkei highlights a shifting narrative. Increasing economic uncertainties and market disruptions have led to a heightened price variability in stock markets, sometimes rivaling that of cryptocurrencies. For instance, since the beginning of August, the Japanese stock market experienced its biggest one-day drop since 1987, with the US also seeing the Dow Jones fall by more than 1,000 points. These significant declines highlight the growing unpredictability in mainstream markets, reflecting broader economic uncertainties and market disruptions. Now, investors are left questioning: Are the volatility risks associated with defi truly worse than those associated with traditional investing?  Historically, classic investing options like purchasing real estate or stocks and bonds have been viewed as a cornerstone of a stable financial plan and are often considered less volatile than cryptocurrencies due to their backing by tangible assets and earnings of the companies they represent. Yet, the recent trends in global markets suggest this stability is being questioned. The upcoming 2024 presidential election in the United States is forecasted to throw in an additional layer of uncertainty. Political developments can heavily impact financial markets, influencing investor sentiment and contributing to market instability.…

---

Filed under: News - @ August 11, 2024 3:58 am