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Home > Courses > Cryptocurrency Trading > Cryptocurrency Trading Basics > Crypto Trading vs Forex Trading

Crypto Trading vs Forex Trading

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Crypto vs Forex Trading

Crypto and forex trading platforms have similarities but equally several differences, and here we will discover some of the most widely debated.

In its rawest form, crypto trading is for buying and selling cryptocurrencies and other digital assets. Forex trading is exchanging one flat currency for another and hoping for a profit when there is a rise in value. 

While supply and demand drive the values of crypto and flat currencies, the driving forces behind them are entirely different. The need for cryptocurrency is extremely high, while forex currencies are driven by pitting one economy against another. This has been the case for many years. Any significant changes can have a massive impact on worldwide economies. 


Cryptocurrency Market Features


The crypto market can be, and mostly is, extremely volatile, far more volatile than the forex market despite the basic premise behind them being pretty much the same for both.

While forex started with larger banking organizations and has continued to do so for decades, crypto originally started with the smaller retailers in mind, and bitcoin has only been around for approximately thirteen years.

Crypto is often viewed and traded as an asset by traders and brokers rather than being recognized as a currency in its own right. Cryptocurrencies are run on blockchain technology, and vast amounts of investment are currently being pushed at its infrastructure as demand increases substantially. 

The trading structure differs because the pricing for forex is created between interbank markets. In contrast, crypto is based on the liquidity shown to traders at the two trading locations.


Similarities in Crypto and Forex Trading


Both flat currencies and cryptocurrencies are driven by supply and demand. Both crypto and forex trading takes place twenty-four hours a day, although crypto can also be traded at weekends, whereas forex closes at weekends. Some forex brokers allow selling over the weekend, but it would be dealing with the brokers themselves and not the F.X. Both crypto and forex have offices around the globe and can, therefore, local service clients around the clock.

Both forex and crypto trading use specific trading terms that the beginner trader must become accustomed to. This is required to understand the system and be less intimidated and vulnerable while trading. A trader can combine both types of trading if they wish to fund their forex trading account with bitcoin.


Which is Best - Crypto Trading or Forex Trading?


Forex trading is purported to be a much safer bet than crypto trading. Cryptocurrency has no central authority, and thus it is highly volatile and prone to far more significant swings in the financial market. This is by comparison to the forex trading markets, where the exchange rates barely move from one day to the next. Crypto generally has lower trading volumes, whereas forex traders are given more leverage which, in turn, allows for larger trades to be carried out.

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