Forex And Crypto Trading: The Simple Difference!

Forex & Crypto Trading

Forex & Crypto Trading

It is no doubt that there is a goldmine in the internet. A lot of trades occur here, but we don’t mention digital trading without forex and crypto trading. Forex and cryptocurrency trading are the most prevalent of all trades globally. What is the difference between these two markets? Forex and Cryptocurrency!

The truth about forex and cryptocurrency trading review is that both involve electronic trade of various currency forms. However, the size, structure and behaviour of both markets vary. Let us now in details, take a look at the difference between these two.

The Supply

The amount of cryptocurrencies created for circulation is limited. And as such the demand for these cryptocurrencies is high. This also applies to their prices. For example, the amount of bitcoin that can ever be created is 21 million.

On the other hand, the forex market consists of unlimited currencies and the world’s global financial markets. The value of currencies in this market is only affected by supply and demand.

Transaction Costs Of Forex & Crypto Trading

‘Lower Costs’ makes one of the major headlines in the bitcoin blockchain. Thats true. The fact that there are no intermediaries (like banks) when it comes to exchanging cryptos makes transactions cheaper. Unlike in the forex market where brokers often charge a fee.

However in crypto trading, we use cryptocurrency exchanges to trade our assets (cryptos). For example, Luno Exchange. These exchanges help us makes quick transactions and also as a storehouse for our cryptocurrencies. Cryptocurrency exchanges also levy fees per transactions. Exchanging cryptos become completely free, only when you export a private key from one wallet and import to another wallet.

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Potential Gains And Liquidity

Forex & Crypto Trading

Forex trading is more stable and skill based than cryptocurrencies trade. Due to its high level of volatility, crypto trading can make you very good money and very fast, you do not need to study as much, general trading information and ability to predict the markets is enough to start. Imagine investing $500 in Bitcoin in 2013, this yields $200,000 in less than 5 yrs.

On the contrary, the forex market is seen as more accessible than cryptos because it can be traded directly through a broker and there is a higher number of market participants to take the other side of a trade. In contrast, crypto trading is less liquid and requires a wallet and exchange account.

Hopefully, this article on forex and crypto trading gives you enough information about both markets. It is strongly advisable for newbies looking for crypto trading meaning or cryptocurrency trading for beginners to first of all know what cryptocurrency is all about before rushing to learn how to trade. Also, the same goes for forex.

Forex And Crypto Trading (Conclusion)

In the end, the key difference between cryptocurrency trading and forex trading is the volatility. While the volatility of two trading pairs in forex is very low, around 0.5 to 1%. That of bitcoin and other altcoins is about 10% which is very high. So, their is a higher tendency to make more profits as well as losses in crypto trading than in forex. It’s important that you have your forex and crypto education before investing your money!

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