Part 7/12:
5. Regulatory and Political Risks
Stocks: Directly impacted by government policies, trade restrictions, and tax laws.
Bitcoin: Though susceptible temporarily—if exchanges are shut down or bans enacted—it is designed to be decentralized and removes the need for trust in government. Over the long run, it can actually benefit from regulatory pushback, as it offers sovereignty over one's wealth.
6. Liquidity and Market Liquidity
Stocks: Generally highly liquid, especially larger indices.
Bitcoin: Liquidity has improved but can be impacted by market size. As adoption grows, liquidity will increase, reducing slippage and making large transactions feasible.
7. Currency and Exchange Rate Risks
- Stocks: Affected when operating in unstable currencies.