Trading in Crypto Exchanges versus in Stocks Exchanges
Since some people seem to confuse this I will clarify with a comparison.
Trading in Stocks
Stocks on big exchanges needs to fit certain criteria.
To be listed on Nasdaq
- The earnings for 3 consecutive years needs to be positive
- The market value of the publicly held stocks needs to be above a certain value.
- Stockholders’ Equity needs to be $15 million or above
The list continues
So when you see a stock on the Nasdaq exchange you know that it fits many criteria. For a smaller stock exchange the rules and regulations are not as demanding.
Trading in crypto currencies and tokens
To be listed on Binance for example
These are not hard rules but advise since ultimately Binance will do the selection. As a rule of thumb, for every 4000 applications Binance will list 400.
- Show us you have a large user base, with multiple easily verifiable sources such as Alexa, Twitter, Reddit, Telegram, etc.
- You should have a working product or at least a prototype.
- When it comes to the team, we care about history more than ability. Afterall, anyone can claim they know C++, but not that many can say they worked on bitcoin and as part of the core team and have the commit history to back it up.
Summary
If you go into decentralised exchange like EtherDelta or another small exchange there is little regulation. Anybody can add a trading pair on EtherDelta. On a big Crypto Exchange like Binance the crypto currencies and tokens needs to fit certain criteria.
If you trade Stocks on a big Exchange you will only see stocks that fits the rules and regulations of that exchange. The companies needs to provide financial reports and so on. On smaller stock exchanges there are less rules, this to make it possible for smaller companies to be listed.
Regulation is sometimes seen as something negative in the crypto space. Regulations are there to protect the investors. Regulations are in place to avoid scams.
Disclaimer: I am not a financial adviser and my formal training is in computer science.
Sources
https://www.linkedin.com/pulse/binance-listing-tips-changpeng-zhao/