Forex and cryptocurrency are very similar forms of trading. While the former focuses on trading in fiat currencies, the latter mainly includes trading in newer digital currencies.
Both trading modes are also growing very fast. Both currencies are achieving earnings of trillions of dollars and are also becoming more relevant in finance and economics.
Everyone seems to be interested in these forms of trading. Some of them are actually studying to become a broker, while others are simply adjusting to the awareness of these popular trends.
However, there are several factors that differentiate forex and cryptocurrency trading:
Cryptocurrency is a very volatile market. This is mainly due to their lack of credit or underlying value, which makes this form of trading particularly susceptible to market fluctuations.
In finance, volatility isn’t necessarily a bad thing. It can be reasonably assumed that this term can also be applied for an increased return on investment. Unfortunately, the other side of the coin is downright tragic. Just consider cryptographic crashes that have occurred recently and you will realize its potential risk.
An increase in regulation is mainly the only factor to blame here, but it should also give you an idea of the unpredictability of the market if you are considering entering this form of trading.
On the other hand, volatility is not that high in the forex realm. Major currency pairs such as EUR / USD and USD / JPY are among the most consistent and reliable in this form of trading. They are also very liquid and do not present many obstacles when it comes to buying and selling in real time.
Regulations and safety
The advent of Bitcoin in 2009 made the concepts of blockchain and cryptocurrency very relevant, which helped them gain popularity and enthusiasm not only in the financial sector but also in the technology sector.
However, the cryptocurrency market carries a certain security risk. Desktop assets and wallets are a special type of money that is somehow stored on the web, which makes it vulnerable to security breaches and hacker attacks.
Furthermore, the lack of a strong regulatory framework, due to the immutable essence of a currency such as blockchain, increases the size of possible threats, compromising the integrity of doing business in this form of commerce.
One could almost make the same point for forex, as there is no single body that controls it, but each jurisdiction has its own regulatory entity responsible for licensing brokers and performing audits.
Several efforts have been made to regulate the main existing cryptocurrencies, with the UK’s Financial Conduct Authority being the best known. These initiatives have been too slow and have not yet managed to register all operators.
Transparency and accountability
The fundamental nature of blockchain and currencies like Bitcoin helps protect holders from market manipulation, despite what you may think after reading the information listed above.
Similarly, there have also been scandals in the foreign exchange market, so regulation by banks and authorities does not guarantee the absolute absence of corruption. This scenario is virtually impossible in the cryptocurrency market, as the blockchain is decentralized and has no connection with a central control point.
https://linitiative.ca/forex-vs-crypto-trading-what-are-the-differences/https://linitiative.ca/wp-content/uploads/2022/03/Photo-by-Wance-Paleri-on-Unsplash_resize.jpghttps://linitiative.ca/wp-content/uploads/2022/03/Photo-by-Wance-Paleri-on-Unsplash_resize-150×150.jpgfinanceForex and cryptocurrency are very similar forms of trading. While the former focuses on trading in fiat currencies, the latter mainly includes trading in newer digital currencies. Both trading modes are also growing very fast. Both currencies …administratorTo write