The following is a guest post from Shane Neagle, Editor In Chief from The Tokenist.
Not all narratives are created equal.
In the age of digital financial platforms, investing in all kinds of assets has never been easier. This is happening at a time when the stakes are both clear and high. In order to outpace the erosion of money due to central banking, otherwise known as inflation, investing has to yield sustained high single-digit returns at a bare minimum.
But in a rush to outpace inflation, in addition to offset capital gains tax, investing has become akin to gambling. This is especially apparent in the blockchain space. To become more resilient when staking an asset, what should investors keep in mind?
Barrier to Entry: Stocks vs Cryptos
Lowering the barrier to entry works both ways in the crypto world, but not so much in the stock world. On one hand, people have easier access to capital, but on the other hand, companies face increased scrutiny and regulatory burden by going public. This is evident by the stocks drop off since the mid-1990s, having fallen by 56% by 2020 from over 8,000 stocks.
Because publicly traded companies are based on physical operations that exert expenditures and require quarterly financial reports, there is a cycle of inflows and drop offs.This leaves the number of stocks at approximately the same level, reliant on business cycles.
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Author: Shane Neagle