Explore whether crypto staking aligns with Islamic law in our comprehensive guide. Learn the key considerations for compliance. Read more to find out!

Many blockchain networks' well-regarded decentralization and security benefits are highly dependent on one specific activity — 

. Staking involves contributing crypto funds to 

 (PoS) blockchains to power the transaction validation activity on them. Stakers — which can be institutional entities or individuals — lock their cryptocurrency funds on these blockchains to receive the chance to validate blocks of transactions. In return, they receive cryptocurrency rewards for their work, making crypto staking a potentially viable income source. 

Many individuals and smaller business entities who lack the technical capacity or financial reserves to act as blockchain validators can still earn staking rewards by delegating their funds to their preferred validator on a PoS blockchain.

Along with liquidity mining, yield farming and crypto coin trading, crypto staking is one of the critical ways to earn income within the blockchain industry. Many Muslim investors may wonder if crypto staking is a halal activity. In this article, we cover all the key details related to crypto staking and its status from an Islamic law perspective, in order to help Muslim investors decide whether staking cryptocurrencies is halal or haram.

In order to maintain their operations and process transaction blocks, certain blockchain platforms (those based on a PoS block validation model) require the availability of crypto funds contributed to the network. This is because these blockchains award the right to validate transaction blocks to 

 that have staked/contributed a certain amount in the network's native cryptocurrency. In the most standard implementation of PoS, the more funds a node has staked on a platform, the higher their chance of being selected as the validator of the next block. This system is used to encourage participation from validators who have 

 — that is, those genuinely interested in supporting the network and ready to contribute funds for this purpose.

Staked funds aren't given away or "donated" by validators — they remain the property of the validator, and can be reclaimed/unstaked if and when the network participant who has provided them decides to stop their block processing activities. To encourage users' participation in the block validation process, validator nodes earn staking rewards for each block they help process.

Most crypto users don't act as full validator nodes on PoS networks, as this often requires substantial minimum staking amounts and technically intricate processes to set up and run a node. However, these users can also earn income from staking crypto in various more affordable and user-friendly ways. Examples include delegating their funds to their preferred validator on blockchains supporting such delegation, or participating in a staking pool (more on that below). Via these options, users can earn a share of the total staking rewards awarded to full validator nodes.

Additionally, crypto users can earn staking rewards using specialized products on crypto trading platforms and crypto exchanges. One such product is 

, previously known as Bybit Staking, which allows you to earn staking rewards without the complexities of staking in blockchain environments. Staking products on exchanges often provides a wider choice of crypto tokens and coins than direct blockchain-based staking. This is because blockchain-based staking options are limited to native coins of PoS networks, whereas exchanges frequently offer additional assets, such as popular 

Independent staking involves setting up and running your own full validator node on a PoS blockchain network. You are responsible for technical setup procedures and are typically required to keep your node online and ready to process blocks without significant downtime.

Minimum staking requirements for independent staking are often substantial. For instance, the 

 (ETH) blockchain requires validator nodes to stake at least 32 ETH (around $80,000 as of Nov 1, 2024), while becoming a 

 (BNB) validator requires an investment of 10,000 BNB (currently around $5.7 million). Technical uptime requirements aren't child’s play, either, as validator nodes are encouraged to be online at all times, and frequent downtimes may lead to penalties in the form of slashing, whereby you lose some portion of your staked funds.

The advantage of independent staking is that you can earn substantial amounts by receiving full staking rewards from the blockchain. On PoS platforms such as Ethereum, full validators don't need to pay anyone commission fees or other charges, nor do they have to share their rewards with others. In comparison, on 

 (DPoS) blockchains, independent validators share the rewards with those who have delegated their funds to them, but typically still earn a more significant cut than each individual delegator.

For most crypto users, the technical and financial requirements of independent staking are too high. As an alternative, these users can join a staking pool to earn crypto rewards. Staking pools are platforms that facilitate the pooling of crypto funds from many users. These funds are then used to manage the actual direct staking, for instance by running validator nodes or delegating the funds to blockchain validators. By joining a staking pool, you can earn a share of staking rewards commensurate to the share of funds you’ve provided. With PoS staking pools, you only need to contribute crypto, and don't have to worry about providing computing capacity.

Understanding Islamic Finance and Crypto Staking

For many Muslim investors, adhering to the principles of Islamic finance and Shariah law is important when choosing an investment product. Islamic finance principles state that any investment should avoid interest (riba), speculation/gambling (maysir) and excessive uncertainty (gharar). It also shouldn’t involve trading assets that you don't actually own, or be related to haram activities or products, such as drugs, alcohol, pork, gambling, betting or pornography.

When evaluating whether crypto staking is a halal activity, it's important for investors to differentiate it from other popular forms of earning crypto income: liquidity mining and yield farming. 

 involves providing crypto funds to coin swap pools on 

 (DEXs). These funds are required by some DEXs — those based on the 

 (AMM) model — to have enough liquidity for swap operations. Liquidity providers earn a share of transaction fees from swaps involving the assets in the pool. In turn, 

 refers to the strategic allocation of crypto funds across various 

 (DeFi) protocols to maximize yields earned. Yield farming allocations can often involve borrowing and lending activities, often with the involvement of interest (riba).

Learn all about Bybit Islamic Account and

Unlike many yield farming activities, crypto staking doesn't usually involve riba. There is no lending or borrowing of funds with interest in crypto staking. Stakers invest their funds to support the operations and security of blockchain networks, and earn staking rewards based on the amounts they’ve contributed. These reward payouts aren't based on money that has been lent to someone with interest.

As noted above, crypto staking isn't an interest/riba–based activity. Additionally, there's no maysir, or gambling/speculation, in crypto staking: stakers earn a certain amount of relatively stable income that has little to do with speculative trading activities. The fixed and stable nature of crypto staking rewards also indicates no gharar, or excessive uncertainty. In fact, crypto staking is considered among the least 

 or speculative forms of earning income in the blockchain industry.

As such, crypto staking lacks the characteristics of the three fundamental prohibitions in Islamic finance — riba, maysir and gharar. This indicates that staking cryptocurrencies on blockchain platforms may qualify as a halal activity.

Additionally, Muslim investors need to ensure that the blockchain platform they support with staking isn't involved in haram activities, such as those related to alcohol, pork or other products forbidden in Islam.

With crypto staking being a halal activity in most cases, investors might be wondering which staking platforms and coins are the most suitable from the Islamic finance perspective. Below, we list five cryptocurrencies and their associated blockchains that are likely the optimal choices for a Muslim investor looking for staking opportunities. These five options are among the largest PoS networks in the industry. This ensures that their staking processes are among the most stable and predictable in the cryptosphere, which helps minimize the probability of gharar. 

As the largest players in the industry, these chains' native cryptocurrencies also feature some of the highest current trading volumes, which ensures a higher degree of price stability and a lower likelihood of speculation/maysir for these coins. This is also a key factor from an Islamic finance perspective, as you’ll stake and earn rewards in these platforms' respective crypto assets.

Ethereum (ETH) — specifically, its current PoS version, 

 — is the world's largest blockchain currently utilizing staking for block validation. It’s known to provide stable and highly sought-after staking rewards in its native cryptocurrency, ETH. While independent staking on the network, which requires 32 ETH collateral, is financially not viable for many crypto users, you can still join a staking pool to earn rewards.

 (SOL) is another top PoS blockchain. It typically features faster processing times and lower fees for crypto transactions than Ethereum. Unlike Ethereum, Solana doesn't impose a minimum amount to run a full validator node. In theory, that means anyone could run an independent staking operation on the blockchain. However, in practice, the competition among Solana validators for the chance to validate blocks is intense, and those with modest amounts staked in them are unlikely to win the race. The good news is that Solana, unlike Ethereum, supports stake delegation. This gives you two practical options to earn staking rewards as an ordinary user: delegate your stake to a preferred validator, or join a staking pool.

 (ADA) is a leading PoS blockchain network that exclusively uses staking pools for its block validation. This means there's no individual staking on Cardano. To participate in staking on this blockchain, you have two options: run your own pool, or, as a more practical choice for most users, join an existing one.

 scalability solutions for Ethereum. At the heart of its ecosystem is the Polygon PoS blockchain, which supports independent staking via running a validator node, as well as stake delegation. 

Currently, Polygon validators are required to stake their POL on Ethereum’s network, although the platform plans to enable full direct staking via its own chain in the near future. For most users, however, stake delegation is the best option: in this mode, you don't need to worry about technical intricacies, such as which actual network — Polygon or Ethereum — is handling your stake. Besides the stake delegation option, you can also choose an external staking pool provider for the platform's native token (POL).

 (AVAX) is another popular and well-regarded blockchain that offers staking. Somewhat smaller than most of the chains described above, Avalanche is still among the heavyweights of the blockchain industry: its native coin, AVAX, has amassed a 

 of over $10 billion (as of Nov 1, 2024). 

Avalanche offers direct independent staking: you can run your own validator node, or delegate your stake. The independent validator staking option requires collateral of 2,000 AVAX ($49,880 as of Oct 31, 2024), while the minimum requirement for stake delegation is a relatively modest 25 AVAX ($623.50). As is the case with other major PoS chains, you can also find a variety of external staking pool providers for AVAX.

The crypto market features a variety of passive income opportunities, but identifying which ones are halal isn't always straightforward. In its typical format, crypto staking can be considered a halal activity, as it doesn't involve lending or borrowing funds with interest (riba), speculative trading akin to gambling (maysir) or excessive uncertainty (gharar) often associated with some other crypto activities. As such, Muslim investors can use cryptocurrency staking, although it's always important to carefully scrutinize the actual activities of the crypto project offering staking. If these activities aren't linked to haram industries or products, staking may be one of the safest options for a crypto-minded Muslim investor. 

Disclaimer: Due to varying opinions on Shariah compliance of crypto trading, we recommend you to conduct your own further research. Please note that the posts on Bybit Learn should not be considered as fatwa. Our aim is to present information on different topics to empower readers to make informed decisions.

Intermediate

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Is Crypto Staking Halal? All You Need to Know

Discover how to trade USDC perpetual futures on Bybit. Learn about margin types, collateral options, order types and risk management tools.

Perpetual futures at Bybit enable traders to speculate on cryptocurrency prices without expiration dates, providing flexibility for a wide range of strategies. With the added stability of USDC, one of the leading USD-pegged stablecoins, alongside customizable leverage and robust risk management tools, USDC perpetual futures are an ideal choice for both novice and seasoned traders.

What Are USDC Perpetual Futures Contracts?

USDC perpetual futures contracts are a type of crypto derivative that lets traders speculate on asset prices without needing to worry about contract expiration dates. This allows traders to hold positions as long as they meet margin requirements.

 (USDC) is a stablecoin pegged to the U.S. dollar (USD), designed to maintain a 1:1 value with it. It’s widely used as collateral in crypto trading for its stability and reliability.

Top Bybit USDC Perpetual Futures by Trading Volume 

Bybit offers several popular USDC perpetual futures contracts, with the highest trading volumes often seen in BTC-PERP, ETH-PERP and SOL-PERP. 

These contracts allow traders to speculate on the price movements of major assets while using USDC as margin, providing stability and flexibility in volatile markets.

How Do USDC Perpetual Futures Contracts Work?

 on Bybit allow traders to use USDC as collateral to speculate on price changes of major crypto assets. A key feature of perpetual futures trading is the 

, a periodic payment exchanged between long and short traders to keep contract prices close to the asset's spot price.

How to Trade USDC Perpetual Futures on Bybit

1. To trade USDC perpetual futures on Bybit, start with depositing USDC into your Unified Trading Account by selecting your preferred deposit method in the 

Bybit offers leverage of up to 125x, allowing you to amplify gains or losses. Adjust leverage according to your 

Margin Requirements for USDC Perpetual Positions

How to Calculate Position Sizing for Perpetual Positions 

Position sizing is essential in perpetual futures trading, because it determines the capital at risk and supports effective risk management.

 to estimate appropriate sizing based on risk tolerance and account balance.

, in the example shown above, a trader opens a 

 of 180 USDC, the trade yields a profit of 500 USDC, resulting in a return on investment (ROI) of 277.77%. Bybit’s 

 helps traders determine the optimal position size, based on leverage and risk.

Other Advanced Tools for USDC Perpetual Trading

Conclusion: Getting Started With USDC Perpetuals Futures

Trading USDC perpetual futures on Bybit offers unique advantages, such as using USDC, one of the leading stablecoins, as collateral. This makes USDC perpetuals a reliable choice for those who are wary of market volatility. Bybit’s platform provides additional features, such as flexible leverage, advanced trading tools and access to in-depth market data, which together enhance trading precision and control.

However, it’s essential to grasp the risks involved. Leveraged positions amplify both gains and losses, so understanding risk management tools — such as setting stop-loss orders — is crucial for preserving capital. New traders can explore 

, a valuable tool for practicing strategies without risking real funds that lets you build confidence and develop effective trading habits before diving into live markets. 

 and explore our flexible perpetual futures contracts.

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The Global Dollar Network, launched by leaders in fintech and digital assets including Anchorage Digital, Bullish, Kraken, Nuvei, Paxos, and Robinhood, aims to accelerate global stablecoin adoption. 

Daily Top Performer — Mask Network (MASK)

The S&P 500 fell 0.28% as investors anticipated the U.S. election and a likely 25-basis-point Fed rate cut, with major tech stocks like Tesla and Amazon leading the decline. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 1.94%, with Bitcoin and Ether dropping by 2.39% and 3.87%, respectively in the past 24 hours.

Today’s top performer is MASK, which surged 8.0% following Mask Network’s unveiling of a revamped website with enhanced features and tutorials.

Mask Network, founded in 2017, is a protocol that bridges Web 2.0 and web3, enabling users on platforms like Twitter and Facebook to access web3 features, including crypto and NFTs. It supports multiple blockchain networks, such as Ethereum, BNB Chain, Polygon, and Solana, making it chain-agnostic. Mask Network 

 an update to its website, featuring a new layout that highlights product features and a revamped tutorial page.

Check Out the Latest Prices, Charts, and Data of 

, launched by leaders in fintech and digital assets including Anchorage Digital, Bullish, Kraken, Nuvei, Paxos, and Robinhood, aims to accelerate global stablecoin adoption. The network introduces USDG, a new stablecoin issued by Paxos, compliant with Singapore’s Monetary Authority framework. It seeks to address shortcomings in current stablecoins by providing trusted, low-cost options for enterprises while rewarding network participants. The initiative encourages collaboration among custodians, exchanges, and financial institutions to innovate in global money movement. USDG is now available through various partners, with DBS Bank managing its reserves.

Yesterday, Bitcoin spot ETF flows totaled -$579.5 million, with the Grayscale Bitcoin Trust (GBTC) accounting for -$63.7 million and non-GBTC products comprising -$515.8 million.

 opens on November 7th, with a current pre-market price of $0.04. For claiming, users can visit the provided link: 

Beginner

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Global Dollar Network Launched to Boost Stablecoin Adoption with New USDG Stablecoin

Web3 gaming is a multibillion dollar industry with millions of players worldwide. Its games come in a variety of styles. Learn more here.

 has transformed its role from that of a cutting-edge financial investment to become a part of everyday life. While 

 concepts are used for a multitude of practical services, they're also a fantastic source of entertainment. Gaming is currently one of the biggest applications of web3 design. By adding blockchain features to gaming experiences, developers have been able to make games even more exciting and meaningful. Explore this guide to see why web3 gaming is so popular. 

Web3 gaming is a multibillion dollar industry with millions of players across the globe. Its games come in a variety of styles, ranging from first-person shooters to puzzle games. The main commonality among all of these games is the use of blockchain technology, such as in-game cryptos and 

“Web3 gaming” might sound pretty high-tech, but it's actually surprisingly simple. Web3 games are just standard games that incorporate blockchain technology into their designs. 

The majority of web3 games rely on two basic structures: half of each game is a standard video design that uses coding, software and hardware to create a system in which users input instructions and receive a gaming experience. The component that differentiates web3 gaming from other gaming is that of its blockchain technology. While designing their games, web3 developers also connect their systems to a blockchain, setting up multiple 

 that trigger when certain in-game actions occur. This design allows web3 games to include all sorts of blockchain mechanics. The following are a few examples:

Web3 gaming is an incredibly broad industry. Some web3 games are simple mobile apps where you tap a single button, while others are complex worlds that require hours of practice to understand. To get a good understanding of the web3 gaming landscape, it's useful to take a look at some of the most common types of games.

 gaming or DeFi gaming, investment gaming emerged as the first generation of web3 games, essentially a gamified version of standard crypto investment, with features such as 

 focus primarily on making money, but they use a game-based interface to make the process more entertaining.

 or P2E games) gamify standard behaviors. Users might tap a button or take a walk in real life, and then their action mines cryptocurrency that’s directly deposited in the player's wallet. Ever since the earliest 

, this has been one of the most popular forms of web3 gaming.

The modern generation of web3 game development is moving away from repetitive, crypto-focused designs and instead attempting to copy strategies from the traditional gaming industry. Competition-based games involve players battling each other. Though players can earn digital assets, the main goal is simply to compete with each other. Game options like 

 mimic first-person shooter competitions, while styles such as 

 gaming. This style of gaming prioritizes socializing with other gamers and building a community. Options like 

 create complex worlds in which players can create a character to role-play and interact with other characters.

The unique technology behind web3 gaming allows this industry to offer players key features they can't find anywhere else. Depending upon the game you choose, you may be able to enjoy many different fantastic game components.

For many players, the big appeal of web3 gaming is that digital assets have actual value. Using blockchain technology for in-game currency and items allows players to trade their assets both within and outside of the game. This allows the market to assign their assets a value, and players can choose to convert their items into other types of currency if they wish to.

Multiple games in the web3 space operate under the principle of decentralization. Instead of having one company run the entire system, the game is run as a collective of players and developers. Blockchain technology allows players to vote on various decisions, such as what mechanics to add to the game or what the price of an object should be. 

The majority of web3 games emphasize player ownership of in-game items. Users have direct control over the things they earn and create within the game. Not only can players buy and sell their possessions as they wish, but they can choose how to use or upgrade their digital assets.

Virtual Reality and Artificial Intelligence

Web 2.0 gaming is at the forefront of gaming design. Though virtual reality, augmented reality and artificial intelligence technology aren’t a requirement for web3 gaming, they’re far more common within the gaming sector. Many games hope to use these technologies to offer the most immersive and detailed experiences possible.

All the unique features of web3 gaming make it a particularly useful type of gaming universe. Compared to traditional games, web3 games have many special advantages.

Blockchain technology is a highly useful tool for game developers. For example, it makes it a lot simpler to manage things like player rewards and land generation, giving developers more options when designing their games. Web3 gaming systems also have the ability to run online, seamlessly interacting with a variety of 

 products and blockchain tools. Ultimately, this means that the web3 gaming community has some truly unique games that couldn't flourish with standard technology. 

Web3 ecosystems streamline the process of making a profit from games. Since it's so easy to transfer and trade assets, players can more easily convert their gaming skills into cash. Not every player may make millions, but web3 games come with many opportunities to earn money.

Since web3 games often run on principles of decentralization and transparency, they're often an ideal way to safeguard players' rights. Players usually retain control of their own data and don't have to worry about their hard-earned assets being taken away from them. Furthermore, web3 games typically value and respect the input of their communities. Blockchain technology makes it easy to ensure that community members are involved in every step of game production.

Web3 games are known for their capability to offer an immersive and seamless gaming experience. In-game transactions and crafting are directly linked to real blockchain assets, so gamers can feel particularly connected to their games. Instead of having all gaming experiences take place within a specific program, gaming experiences have real-world ramifications that can be explored through multiple blockchains and online communities. 

Though web3 gaming has many benefits, it's not always a perfect ecosystem. Here are some of the issues that web3 gamers may encounter. 

Web3 games operate with some nontraditional technology, so they can be quite confusing. Instead of simply downloading an app or launching a website, users might need to do things like 

. This adds an extra layer of complexity that may make it hard for web3 games to onboard new users.

While web3 games have the potential to offer an immersive experience, it's not a requirement. The focus on investing and profitability has led to some criticism from the gaming community. There are quite a few projects designed simply to make money, and these often struggle to engage players. Many gamers complain about web3 games with overly repetitive mechanics, cheap artwork or bland storylines. It can take some time for gamers to sort through the vast amount of web3 projects and find games that are fun to play for hours at a time. 

Both web3 gaming and traditional gaming hope to appeal to the same user base. Both styles of gaming endeavor to entertain people by appealing to their competitive and creative instincts. There’s quite a bit of overlap in the styles of games being released, and the same developers and gaming studios are working in both traditional and DeFi spaces.

However, unlike traditional games, web3 games can take advantage of newer technology. This style of gaming offers many unique aspects not found in traditional games:

Web3 gaming is still a fairly new industry, with many changes ahead. Currently, the big trend in web3 gaming is 

 models. However, online discussions suggest that users may be shifting away from simpler games. There's been a growing demand for more complex games that mimic the depth and creativity of AAA games. 

 with endless possibilities for fighting, crafting, exploring and more. In the future, web3 games may begin to prioritize entertainment and engagement over investment opportunities. You can expect to see fewer games with DeFi tie-ins, and more games that try to mimic the appeal of games like 

Web3 gaming is poised to become one of the biggest blockchain industries. 

 by 2030. With so much potential profit, web3 gaming is certainly worth exploring. Both amateur traders and professionals have the chance to earn money through different games in web3 spaces.

However, keep in mind that the days of earning thousands of dollars just by tinkering around with a new GameFi product are most likely over. With so many products on the market now, it's much harder for players to earn money by tapping a few buttons. Instead, the big investment opportunities are more likely to come from supporting the products themselves. While you might be able to make a little money by playing a game, purchasing a new game's crypto and watching it grow is likely to be a more efficient and profitable use of your time.

Web3 gaming's capacity to combine entertaining game mechanics with profitable blockchain technology has helped this industry soar. Not only are blockchain games currently worth billions of dollars, but they're also poised to capture more players than traditional online games. Investors who want to be on the cutting edge of web3 trends would certainly do well to pay close attention to web3 gaming.

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Web3 Gaming: Elevating Play to Next-Level Realities

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Investing

Trading

Crypto

Compare the pros and cons of investing in cryptocurrencies versus stocks, including risk, regulation, and potential returns.

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Over the past few years, cryptocurrencies have become a popular and commonly traded asset class. Although the crypto market is still well behind the stock market by size and trade volumes, it has achieved impressive growth in recent years, with many investors increasingly appreciating the unique benefits that this young asset class may deliver. Among these benefits are higher potential returns, with Bitcoin (BTC) having vastly 

 in recent years; low barriers to entry; diverse choice of assets; and independence from a central controlling authority.

Despite these benefits, many investors are concerned about levels of regulation for both cryptocurrencies and their trade. Having grown accustomed to the tightly regulated stock market, some investors find crypto too risky for their taste. Yet, over the last few years, the levels of regulatory control and oversight applied to cryptocurrency have grown substantially, increasingly blurring the lines between crypto and stocks. 

While cryptocurrencies are still less regulated than traditional asset classes, such as stocks, bonds, commodities and forex, they now operate under a much more defined and rigorous regulatory system that allows more investors — including those who have traditionally stuck with the stock market — to take advantage of crypto's unique benefits.

With crypto becoming increasingly accepted as a viable form of investment, many investors and traders are now wondering if trading cryptocurrencies can provide an edge over trading stocks, or any advantages as an accompaniment to trading stocks. In this article, we look at these two major asset classes of modern finance — crypto and stocks — to help you answer these questions with more clarity.

 are digital assets issued generally circulated on 

 — networks whose operations and security are enforced by a 

 among many (often thousands) of independent network nodes. On these networks, cryptocurrencies are used as the asset directly utilized for facilitating decentralized consensus and on-chain security. 

Additionally, cryptocurrencies act as digital currencies for value exchange and storage within individual blockchains. In addition to its on-chain uses, crypto is also utilized beyond blockchain networks as a digital currency available for trading on both 

In fact, trading crypto via CEXs has become a major activity for many traders and investors, due to its use of an 

 system that greatly resembles that of traditional stock markets. This structure has created a new and vibrant market within the overall finance ecosystem. As of the time of this writing (Oct 21, 2024), the overall market capitalization of all cryptocurrencies stands at over $2.48 trillion, a figure that makes the crypto market hard to ignore.

The world's first and still largest cryptocurrency asset — BTC, more frequently referred to simply as 

 — was launched in early 2009. While thousands of cryptocurrencies have been introduced in the years following Bitcoin's birth, none has managed to topple the pioneer of the cryptocurrency world. Bitcoin still holds slightly over half (54%) of the $2.48 trillion market cap that makes up the entire crypto market. Native to the Bitcoin blockchain, BTC is used to secure the network's operations, pay for on-chain transaction fees and to store and transfer value.

With close to 13% of the total market cap share, 

 (ETH) is the crypto market's second-largest asset. ETH, often referred to as Ether, performs exactly the same essential functions on its own blockchain, Ethereum, as BTC does on the Bitcoin chain — securing the network's operations, acting as a means of payment for on-chain transfer fees and being used to store and transfer value. However, the Ethereum blockchain has an additional functionality that Bitcoin largely lacks — the ability to support 

 (DApps), blockchain-based applications powered by complex programmable logic via 

. ETH, along with the many cryptocurrencies native to these applications, can generally be used for transaction fee payments within the DApps.

The Bitcoin and Ethereum duo dominate the cryptocurrency market cap rankings, together holding nearly two-thirds of the entire crypto market's capitalization.

Stocks are regulated financial assets that grant holders the right to a share of public company ownership. They’re traded on highly regulated stock exchanges, such as the New York Stock Exchange (NYSE), London Stock Exchange (LSE) and Nasdaq-100 (NDX). In the U.S., the primary regulator for stock exchanges is the Securities and Exchange Commission (SEC).

Stock ownership may entitle you to receive dividends distributed by a company, of which you’re a partial owner. However, dividend payments aren't an obligation for a public company, and in many cases, investors don't get this perk for years, if ever. Just ask any stock owner of Tesla (TSLA), a business well-known to have never paid dividends.

Many stock market investors, however, aren't relying on or even expecting dividends from their assets. The typical stock owner is counting on their stocks’ price appreciation to turn a profit.

Stock ownership can also act as an indirect way to invest in a particular commodity. For instance, some investors who want to include gold-linked assets in their portfolios may choose stocks of gold mining companies, such as Newmont Corporation (NEM), Barrick Gold Corporation (GOLD), Gold Fields Limited (GFI) and more.

Crypto vs. Stocks: Similarities and Differences

Both cryptocurrencies and stocks are traded mostly on dedicated order book-based exchange platforms — stock exchanges in the case of stocks, and CEXs in the case of crypto. A small volume of stock trade does occur outside of exchanges, on both private and over-the-counter (OTC) markets. However, the majority of trade volume in stocks occurs on exchanges. Likewise, a modest proportion (usually around 10 to 15%) of crypto trade takes place on blockchain-based DEXs, with the remaining trade flowing through CEX platforms.

Both crypto and stocks can be valuable assets for the purpose of diversifying portfolios. In fact, a popular strategy is to combine these two asset classes to form a well-diversified investment position. Additionally, both markets offer a wide variety of choices for investors. As of mid-October 2024, there are around 60,000 publicly traded company stocks in existence, with the world's largest exchange by market cap (NYSE) listing close to 2,300 of those companies. Meanwhile, the number of cryptocurrencies is far from trivial — approximately 15,000, per data from CoinGecko.

Both cryptocurrencies and stocks can involve scams and underhanded tactics on the part of the companies and entities behind them. Within crypto markets, 

 are the most publicized form of fraud. In a typical rug pull, the cryptocurrency issuer quickly withdraws all liquidity and support for the asset, leaving investors with worthless coins. In the stock market, insider trading — whereby certain investors and groups trade the stock using non-public information that gives them an unfair advantage over other market participants— is a common problem.

 before investing in a stock or crypto token is imperative for all investors who wish to avoid falling victim to such scams.

On average, cryptocurrencies feature a markedly higher level of 

 than stocks. While this reality makes crypto a relatively riskier asset type, it also means higher potential returns. However, that's not necessarily the case in all scenarios. For example, for extended periods of time, certain stocks — particularly in the technology sector — may exhibit greater volatility than the more stable cryptocurrencies, such as Bitcoin.

The stock market is heavily regulated, while cryptocurrencies currently operate in an environment with much lower regulatory oversight. It should be noted, however, that in recent years, the level of regulation in crypto markets has gradually increased. Regulatory authorities such as the U,S, SEC are increasingly turning their attention to crypto. 

While some decentralization purists in the crypto industry dislike this development, the fact is that increased regulation has allowed cryptocurrencies to enter the financial mainstream via products such as 

Stocks entitle each of their holders to a share of company ownership. The company, including its assets, is the underlying entity owned by the stockholder. In contrast, most cryptocurrencies don't confer part-ownership of the blockchain platform or app from which the crypto is issued. The exceptions to this generality are 

, which may mimic the utility of stocks by providing ownership rights with regard to their native crypto projects. However, the full regulatory status of security tokens is still a gray area as of late 2024.

Stock markets are much older and more mature than crypto markets. The first stock exchanges appeared centuries ago, with the oldest exchange — the Amsterdam Stock Exchange (AEX, now referred to as Euronext Amsterdam)— established in 1602. Since at least the 19th century, trading stocks has been a major component of the world’s overall financial system. In contrast, the first (and now defunct) platforms that facilitated trade in crypto assets — Bitcoinmarket.com and Mt. Gox — emerged only in 2010, about a year after the launch of Bitcoin.

Pros and Cons of Investing in Crypto vs. Stocks

The key advantages of investing in crypto include the generally higher potential for returns, crypto’s 24/7 markets and the ability to diversify away from overreliance on stocks. The last point is particularly relevant for investors who tend to concentrate their asset allocations exclusively on stocks and bonds, increasing their dependence upon these markets. Some crypto investors also greatly value the ability to own and trade assets independent of a centralized authority's control.

Among the disadvantages of crypto investment are higher risk/volatility levels, lack of full regulation, and the potential vulnerability of some blockchains to technology hacks. Due to their lower trading volumes than those of stock markets, crypto markets might also be influenced by 

 — market participants who control large shares of a certain crypto asset, giving them more leverage to manipulate its prices. The influence of whales is more of a concern for smaller-cap coins than for assets like Bitcoin, Ether or other major cryptos that feature significant trading volumes.

Investing in stocks provides advantages such as lower volatility/risk, more regulatory protection, familiarity (for many investors) and a lower incidence of outright scams. The stock market is also solidly established, with a long history of data. This allows investors and traders to apply time-tested trading strategies and approaches.

The primary disadvantages to investing in stocks include their lower potential for returns, their limited trading hours and higher barriers to entry for smaller investors. While you can start trading crypto with minimal investment (literally a few dollars), trading stocks involves higher initial investment requirements, often comes with a plethora of setup and brokerage fees, and may have more stringent identification and qualification requirements, particularly when trading stocks internationally.

Crypto vs. Stocks: Which Investment Is Better for You?

You can trade crypto to benefit from the potentially high return rates, low barriers to entry and potential to diversify a stock-heavy portfolio. To start your crypto trading, it's recommended you open an account at an established exchange with significant trading volumes and a sufficient variety of assets on offer. As one of the largest CEX platforms in the world, 

 you various ways to trade crypto assets, including 

 products, such as standard futures contracts, perpetual futures and options.

You can trade stocks if you prefer the protections offered by a highly regulated market, and would like to stay within the confines of a familiar environment. Note that most investors who believe in the power of portfolio diversification allocate their funds to different asset classes, including stocks, crypto, commodities, forex, bonds and more. Thus, it's rarely a choice of one asset class versus another.

For investors interested in trading various asset classes and using a unified environment, Bybit offers the 

, forex and various stock market opportunities, including gold mining stocks and popular indices like the FTSE China A50, Dow Jones, Nasdaq-100 and Hang Seng. 

 investments under an MT5 account are structured in the form of CFDs (contracts for difference).

Through Nov 8, 2024, opening an MT5 account and trading just 100 USDT will qualify you to participate in Bybit's 

Both cryptocurrencies and stocks are highly popular asset classes, with each offering their own unique benefits. Which one you choose largely depends largely upon your 

, starting capital, understanding of crypto and blockchain technology, trading style and willingness to go beyond familiar investment environments. At the same time, for a savvy investor it's unlikely to be the choice of one or the other. To benefit from 

 offered by portfolio diversification, it's always advisable to use both — and perhaps even more — asset classes. At the end of the day, it’s not about which one to choose, but what proportion to allocate to each.

Crypto vs. Stocks: Which Is Better For Investing?

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