Market Fragility Index - The Stock Market vs Crypto

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saimberm
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As the market evolves, we need to ask ourselves which one is more stable – the stock market or crypto market? When you buy a stock, you are an investor in a company, your goal is to see her grow in the future. With cryptocurrency, you are buying tokens of a particular currency to use as a form of payment, or you can hold on to them in hopes that they increase in value.

One of the main things we need to consider when we look at these two options is the market fragility index. This isn't to be confused with market volatility. Market fragility assumes that the market can fall apart as a result of some sort of disturbance. While volatility just means that it goes up and down, a lot.

When does market volatility become a problem? If it doesn't cause a lot of harm, it's not a big deal. On the other hand, it can cause a lot of institutions that provide certain services to go bankrupt, it's a huge problem. Not only because of the valuable service but because of the loss of jobs for many people. Volatility is usually flattened by introducing a lot of participants and liquidity in the market, which is why it's usually not as harmful as market fragility.

What are your thoughts on this subject? Let us know in the comments down below!

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