Mutual Funds Vs Cryptocurrency

5 mins read
by Angel One


Mutual funds are well managed, diversified investments collected from investors with similar goals and objectives. There are different funds, and the person who takes charge of each fund is known as the fund manager.

Mutual funds are mutually collected from people and are invested in capital assets. Fund managers are the investment professionals who decide where to invest these funds and keep track of those investments. Investors who are busy in their routine, who do not have the financial sense and time, find it easy to invest in mutual funds, which offer great returns in the long run and are risk diversified.

Over the previous few years, mutual fund investments have been on the rise, and people are moving towards current investments rather than those traditional investments such as FDs. Cryptocurrency vs mutual funds, according to experts, mutual funds are a much better investment for the longer term.



If you hire a financial expert to look upon your investments, it will cost you very much. In mutual funds, you pay fees in the form of an expense ratio that is very low compared to any other professional you hire.


When a dividend is declared by any stocks where your money is invested, those dividends are reinvested in the funds, thus making your portfolio grow.


The risk is diversified as the fund manager is a professional who has years of investment experience and is leading a corpus of more than 500-600 crores. The manager diversifies the risk and invests somewhere around 60-250 stocks. It is risk diversified.


Mutual funds are very convenient for any user. You need not have any knowledge about the funds and stocks. You can set up an online account and invest as low as Rs 500. You do not have to have a large amount to invest. It is straightforward, just like FDs, in the market, if we see crypto vs mutual funds, mutual funds are easy to understand when compared to crypto. Cryptos are more complex.



You should keep track of expense ratios and sales charges before investing. Higher expense ratios and sales charges can give a dent in your returns. However, many good companies do not cut sales charges, but you should always check before investing and, during the tenure, keep a record of all the charges.


Management problems can come up anytime, and nobody can control them. Any business can have these types of problems. This business can happen if the fund manager does not cooperate with the SEBI guidelines and the company guidelines.


Time duration plays a vital role in mutual funds. Unlike stocks, you cannot play intraday or swing. You cannot expect a sizable profit in mutual funds in a short period. You will have to wait 6-10 years; only then you will see some decent returns or profits in your portfolio. Sometimes your portfolio can be harmful in a short time, but you need not worry if the fund you have chosen is suitable.


Cryptocurrency is a virtual, digital currency that can be used in the same form as our physical currency. Cryptocurrency works on blockchain technology, thus maintaining a ledger of all the transactions. It can be shared from one person to another using crypto-wallets. Though it is not yet legal in India, it is legal in the US, Russia, etc. Nobody has yet governed or regulated it, unlike mutual funds, stocks, FDs, and any other investment.

Many cryptocurrencies are traded publicly throughout the day. Cryptos have become very popular over the last two to three years for their uncertain and unexpected returns. It has given investors a gain of even 1000% in a brief period, thus making it attractive for young students and investors. Like all the other currencies, it also works on the supply and demand of currency and the market. Many external factors are also responsible for its volatility, like government restrictions and regulations, supply and demand, the trading exchange, etc. if we compare mutual funds vs cryptocurrency, mutual funds are considered more safe and stable.



Crypto transactions are entirely anonymous; anybody who wants complete privacy of their transactions can transact through crypto.


The transactions are entirely private, but the data is maintained in ledger accounts through blockchain technology, which can be accessed publicly at any time.


Cryptos are not governed or regulated by any government body or central bank, federal bank. So, there is zero interference or influence from any policies.


Cryptos have given exceptional rewards to its investors in a brief period. It has the possibility to make you a billionaire in a short duration just by investing a few lakhs of rupees.

For example, bitcoin is a cryptocurrency that was moving steadily at 18 lakhs rupees in 2021 and suddenly jumped to 50 lakhs in 5-6 months.



The way it gives big rewards, there are cases where it has declined exponentially too. The volatile nature of cryptocurrencies and no upper and lower circuits like stocks can also give a very deadly downfall. Unlike mutual funds, cryptos are very volatile and have no limit. Crypto vs mutual fund, mutual funds are very safe.


Cryptos are not regulated by any central bodies and thus are not legal in India yet, which can be a notable problem for investors in India. The risk of investing in cryptos will always be there until it is regulated.


Many cryptos are kept in a private wallet which requires a key to access it. If that key is lost, you cannot open your digital wallet, and you will lose all your holdings. There is no way you can regain your lost key.