Biotech Stocks Provide Crypto-Like Growth?

They can provide similar growth, but keep in mind that the risks are similar too.

With cryptocurrencies, investors can find enormous growth, and biotech stocks are similar. The differences are that the share’s prices are usually driven by clinical trials, results and regulations, rather than out of control hype or memes (like Shiba Inu).

Cryptocurrencies and biotech stocks are meant for risk-tolerant investors because both are very volatile. The equivalent of buying lesser-known cryptocurrencies is buying shares of early-stage biotech stocks.

Pre-product biotech companies usually have no revenue, but their projects can make a significant income in the future. Those projects need to succeed in the clinical trials, and the good thing is that only 13.8% of them fail. But still, companies at an early stage are risky.

Usually, what drives a company’s share prices are the plans for the future. Rather than looking into the financial performance metrics, investors prefer to know if the project has a positive validation because that means a stock rise.

To compare, the vaccine developers Moderna and BioNTech between 2019 and 2020 had an enormous growth. Moderna shares expanded 330% and BioNTech 416%. In comparison, Bitcoin and Ethereum grew 45% and 109% in the same period.

Of course, biotech stocks offer cryptocurrency-like returns, but those vast opportunities usually don’t happen twice.

It is important to note that BioNTech and Moderna are exceptional cases. Combining a global crisis and a unique solution is what made their success possible.

So, if you are looking to balance your portfolio, be aware that cryptocurrency is an alternative to biotech in terms of performance. But as mentioned before, biotech stocks usually aren’t as volatile as cryptocurrency.

Just make sure your portfolio has something reliable, so you have something valuable at the end of the day.