Why Are More and More Users Choosing to Trade “Stock Prices” on Crypto Exchanges?

In recent years, an increasing number of crypto trading platforms have launched products often referred to as “crypto stocks,” “equity-like assets,” or even “U.S. stock trading.” These products typically use familiar publicly listed company names, yet operate within crypto trading systems. As a result, they have raised many questions:

Are these products actually stocks? Why not simply buy stocks directly? What problem does trading “stock prices” on crypto platforms really solve?

To understand this phenomenon, the key lies not in the name, but in the fundamental differences in trading structure, profit logic, and user objectives.

I. Crypto Stocks Are Not Stocks, but Tools for Trading Stock Prices

On most crypto trading platforms, so-called “crypto stocks” do not represent ownership or equity in a listed company. When users trade crypto stocks, they are not entered into shareholder registries, nor do they enjoy voting rights or legally defined dividend entitlements.

What crypto stocks provide is a financial instrument that allows users to trade the rise and fall of stock prices. Participants are trading price movements themselves, rather than sharing in a company’s long-term operating results. This is fundamentally different from the traditional securities market logic, where buying stocks means owning part of a company.

Therefore, from both financial and legal perspectives, crypto stocks are not equivalent to stocks, but rather derivative trading products built around stock prices.

II. From a Financial Structure Perspective, Crypto Stocks Are Essentially a Crypto-Native Form of CFDs

Understanding crypto stocks inevitably involves the concept of CFDs (Contracts for Difference).

CFDs are a well-established type of derivative instrument in traditional financial markets. Their core feature is that no ownership of the underlying asset is transferred; instead, both parties settle the difference in price movements. Profits and losses depend entirely on the price difference between opening and closing positions.

It is important to clarify that CFDs are not exclusive to the forex market. Forex, stocks, stock indices, commodities, and even crypto assets can all serve as underlying assets for CFDs. The reason forex is so strongly associated with CFDs in users’ minds is mainly because it was the earliest and most widely adopted market among retail traders.

Within this framework, crypto stocks can be understood as:

A CFD structure that uses crypto assets as the settlement unit, treats the exchange or its market-making system as the counterparty, and tracks real stock price movements.

In other words, crypto stocks are not about “putting stocks on-chain,” but about reconstructing a way to trade stock prices using the technology and liquidity of the crypto market.

III. If Stocks Are Available, Why Do Some Users Still Choose Crypto Stocks?

The core of this question is not about which product is better, but about differences in user objectives.

The stock market is fundamentally designed to serve long-term investors. Buying stocks means participating in a company’s long-term growth, accepting cyclical volatility, and seeking returns mainly through dividends and valuation appreciation.

Crypto stocks and CFDs, by contrast, are designed primarily for traders. Traders are less concerned with a company’s multi-year development trajectory, and more focused on how the market prices that company within a specific time window. They pay closer attention to financial reports, macroeconomic data, industry events, and market sentiment that drive price changes.

In this context, ownership and dividends are not core demands. The decisive factors are whether one can efficiently go long or short, participate in price movements with relatively small capital, and enter or exit the market quickly.

IV. About Dividends: Not “Absent,” but “Not a Core Source of Returns”

In traditional stock markets, dividends are usually distributed quarterly or annually. Their annualized returns tend to be relatively stable, but they are not high-frequency.

In crypto stock or CFD systems, the primary source of returns is price movement itself. In most cases, platforms do not directly distribute actual corporate dividends to users. In some product structures, dividend impacts may be reflected through price or cash adjustments, but this is not the core design objective.

This does not mean dividends are “taken away,” but rather that crypto stocks and CFDs are not designed as dividend-seeking instruments. For users focused on short- to medium-term trading, dividends rarely have a material impact on overall returns.

V. Why Are Crypto Stocks More Attractive to Trading-Oriented Users?

From a practical usage perspective, crypto stocks attract attention on crypto exchanges mainly due to their trading flexibility.

First, the entry barrier is relatively low. Users do not need to open traditional brokerage accounts or handle cross-border fiat settlement processes. In most cases, they can trade directly using stablecoins.

Second, position sizing is more flexible. Crypto stock products often support smaller notional trade units, allowing users with limited capital to participate in the price movements of high-priced stocks.

Additionally, in derivative structures, short selling is usually a built-in capability. Users do not need to borrow shares or arrange securities lending; they simply need to take a directional view to participate in downward price movements.

These characteristics make crypto stocks and CFDs closer to pure “trading tools,” rather than long-term asset allocation instruments.

VI. Why Is Short Selling Usually Unavailable in “Wallet-Type Products”?

When interacting with crypto assets linked to stocks, some users notice that certain wallet-based or on-chain products only allow buying and selling, but not direct short selling.

This is not a missing feature, but rather a result of differences in product structure and risk responsibility.

From a financial standpoint, short selling is not merely a directional choice, but the outcome of a complete derivative mechanism. To enable short positions, a system must provide counterparties or borrowing sources, along with real-time risk control, clearing, and liquidation mechanisms. This requires the platform to assume clear risk management responsibilities during trading.

Wallet-type products, however, are fundamentally positioned around self-custody and on-chain asset holding. They typically do not act as counterparties, nor do they embed complex clearing or risk control systems. Their function is closer to that of an “asset container” than a “trading system.”

As a result, a clear division of roles has emerged in practice:

Asset holding and on-chain custody mainly occur at the wallet or protocol layer;

Price speculation, long/short positioning, and leveraged trading are concentrated within exchanges or derivative systems.

Understanding this distinction helps avoid conflating wallet-based assets with trading-oriented products.

VII. How Can the Entire Logic Be Summarized in One Sentence?

Stocks, crypto stocks, CFDs, and wallets are not substitutes for one another, but financial tools designed to solve different problems.

Stocks are for participating in corporate value and long-term returns;

Crypto stocks and CFDs are for trading price movements;

Wallets are for asset custody and on-chain interaction.

Once users clearly define their objectives, they can make more rational choices instead of being misled by surface-level similarities.

Conclusion: Choosing the Right Tool Matters More Than Choosing the Right Direction

Whether stocks, crypto stocks, or other forms of crypto assets, they are ultimately just financial tools—not goals in themselves. What truly determines risk and experience is whether the tool aligns with the user’s purpose.

If the goal is long-term allocation, participation in corporate growth, and dividend income, traditional stock markets retain irreplaceable advantages;

If the goal is to trade price movements and capture market direction, CFD-based crypto stock products offer greater flexibility and efficiency;

If the goal is self-custody and on-chain participation, wallet-based products are more suitable.

At Bifu Academy, we consistently emphasize clear product boundaries and rational user education. Understanding the financial logic behind different trading structures helps users make choices that better align with their own risk preferences in complex market environments.

This is the value of financial education—and the long-term mission Bifu Academy aims to uphold.