These days, everyone is looking for different ways to increase their income. But the question for many of these people is which of the available ways to invest is better? Investing in Forex or Cryptocurrencies such as Bitcoin, Ethereum, Dogecoin , Uniswap etc.?
Cryptocurrency vs Forex Trading
Forex is the name of the largest financial market in the world, in which substantial trades are formed during the day, and is the investment reference for many people in the world. In this market, gold, oil, currencies, and US stocks are traded, and users can usually trade with any currency. That is, it does not matter what your currency is. Euros, dollars, yen, pounds, and any other currency can be traded in the Forex market. If you buy Cryptocurrency in the Cryptocurrency market, you can not use every currency.
If you want to start trading in the Forex market, you have to take a series of measures due to the current sanctions. The first thing you need to invest in the Forex market will be an exchange. The process of registering with a broker or brokerage is usually a bit difficult, but after completing these steps, you can enter the largest financial market in the world.
Forex Market Features
- As mentioned, the Forex market is made up of global currencies, so the number of currencies available is unlimited.
- In Forex, you can use a leverage of 50 to 1. That means you have a profit of $ 100 for $ 2! Of course, the amount of damage is calculated in the same way.
- Given the size of this market worldwide, it is easy to see that the number of transactions in this market is much higher than in the cryptocurrency market. As a result, market stability does not depend solely on the investment of a few individuals and does not change easily.
- Using fundamental analysis, you can easily predict how the market changes and choose the right currency to invest in.
To understand the difference between Cryptocurrency and forex, you need to know both. However, there are extensive cases about both markets that you need to complete before entering any of them. These include the type of start-up, rules, restrictions, and other options. We are discussing in this section the nature of both markets and their main differences so that you can choose the best market for your investment according to what is important to you.
In the Cryptocurrency market, the only items traded are Cryptocurrencies such as Bitcoin, Ethereum, Tether, and others. Using the cryptocurrency calculator, users find out the amount of capital required and start their cryptocurrency trading by registering with a reputable exchange. In this market, there is no news about oil and gold deals and nothing else.
One of the most important things that make the Cryptocurrency market superior to Forex from the users’ point of view and lead them to buy Cryptocurrency is that in the Cryptocurrency market, you can trade without the presence of any intermediaries if there are many intermediaries in the Forex market.
Cryptocurrency Market Features
- One of the Cryptocurrency market characteristics is that it has a limited supply, which increases the demand for it. Again, this increase in demand leads to an increase in the price of currencies.
- Because transactions with this type of currency do not require the presence of a third party. As a result, transactions are done faster than banking and traditional transactions.
- The possibility of multiplying capital in this market is much higher than other investment methods. Imagine if you had invested as much as $ 1,000 in Bitcoin in 2013; in less than 5 years, your capital would have been $ 400,000!
- Investing in this currency is possible for all people around the world. So no matter where you are in the world, you only need money and the Internet to invest in these currencies.
Similarities between Cryptocurrency and forex
Despite the huge differences between the Cryptocurrency market and the Forex market, the two financial markets also have similarities. In fact, both markets benefit from Internet platforms, and trading in them is easy.
Cryptocurrency vs. Forex
In the Cryptocurrency market, you can start trading and investing with the least amount of capital, and the only fee you pay is not so much for your trading fee. If the Forex market is costly and due to various intermediaries, you have to pay different commissions in each part of your activity.
The average daily turnover rate in Forex trading is around trillions of dollars. The turnover of bitcoin exchanges, as the main cryptocurrencies, is several billion dollars. Forex is a global market influenced by many factors such as political movements, inflation, and unemployment. An average of $ 5.3 trillion is traded daily in Forex.
If we want to compare the volume of daily bitcoin exchanges with the daily volume of Swiss francs in Forex, the Swiss franc accounts for five percent of the Forex market. That’s about $ 265 billion. But the return on the Forex market is about two-thirds the return on cryptocurrencies.
The Forex market is global, and there are Forex brokers all over the world. Forex trading is expensive because all brokers and brokers charge a fee for their services. These costs mean that Forex traders need to have a lot of capital to start their business to enter the market.
Fluctuations in the forex and Cryptocurrency markets
The Forex financial market experiences less volatility than the Cryptocurrency market. This can be a positive trait or a negative trait. Because the profit from buying and selling is not significant, but if you have a large capital, you can make a good profit.
In general, the wide fluctuations in the price of Cryptocurrencies in the foreign exchange market are pleasant for some people and quite unpleasant for others. Whether these fluctuations are pleasant or not depends entirely on the purpose of the investor. For example, users who intend to invest in the short term will benefit the most from this change in volatility. In contrast, people who want stability in the Cryptocurrency market usually prefer to buy Tether because the price fluctuation of this Cryptocurrency is low, and its price is almost equal to the US dollar.
Security and stability of Cryptocurrency and Forex
Security has always been important to users and is well seen in both the digital and forex markets. Although the Cryptocurrency market is much more emerging than Forex, if users increase their knowledge of maintaining capital and using wallets before entering the market, they will never have problems such as losing capital.
The same is true in the Forex market. People often lose their assets when they are indifferent to the issue of security. In Forex, the government usually ensures assets so that the investor does not suffer a loss if the fraud occurs.
Ease of working in the Cryptocurrency market with reputable exchanges
One of the differences between Cryptocurrency and forex, known as the advantage of the Cryptocurrency market, is the ease of trading in the Cryptocurrency market. From entering the market to creating transactions and paying commissions, users in the Cryptocurrency market are much more comfortable and will not face serious challenges.
Although sanctions have been imposed on the global Cryptocurrency market, you do not need to worry about this despite reputable exchanges. The important thing is that given these differences, you need to think about the amount of capital, your goal of investing, the duration, and then choose one of the markets to invest in.
Finally, if you decide to invest in the cryptocurrency market, we suggest you read the article How to Start Investing in Cryptocurrency .