Alexa Josh is a serial entrepreneur who has founded multiple successful in businesses .
The Forex market has been around for a few decades now. But, for more than a decade now, there has been a significant change that led traders to controversy. In 2009, when the first cryptocurrency, Bitcoin, has been created, the trading market was set to change forever.
Obviously, the success of cryptocurrency traders created huge hype about owning and trading digital assets. And, since 2009, the crypto market has continued to grow steadily reaching over 328.000 bitcoin transactions that are made every day in 2019.
Trading forex or cryptocurrencies sounds like a great idea these days. But if you are a novice trader, choosing between these two options can be really challenging. Some professionals believe that comparing trading forex with trading crypto is like comparing pears with apples. However, this isn’t entirely accurate because there are many similar aspects between those two, as well as a number of differences.
If you have no idea what to choose, this article may help you choose both because both crypto and forex trading have a number of advantages.
You must be a savvy trader to fully understand the differences and similarities of the two. However, we will try to be as specific as possible to help you understand the pros and cons of both trading practices.
Crypto trading is often thought of as similar to Forex trading mainly because somehow both of them involve trading currencies. Yet, the two have many differences so let’s start with understanding both in order to understand their similarities and differences:
If you have ever traveled abroad on a vacation, chances are that you have most likely exchanged your money for the local currency. If you have done that, you could say that you have traded currencies. However, although the principle of forex trading is the same, the act of trading doesn’t take place in a physical currency exchange office but rather on a digital decentralized market.
Naturally, as the trading takes place in the digital world, there is no single location for traders to transact currencies. Everyone with a computer and a good internet connection can get online and trade forex.
Forex also involves a middleman, be it a broker or other institutions that take fees from the traders every step of the trading process.
Forex trading is now a large and well-established practice, while cryptocurrencies are still a newcomer to the scene of trading. Cryptocurrencies are digital assets that involve peer-to-peer financial transactions. What made cryptocurrencies so popular but also controversial in the trading scene is the fact that they have created a global transaction market that functions independently from both central banks and governments.
As mentioned before, although some people believe that crypto and forex trading are nothing alike, there are, in fact, many similarities between the two. Here are the main similarities between them:
Although the crypto and Forex market have many similarities, there are also very important differences that traders must know when choosing between the two:
Obviously, whether trading Forex or Crypto is a better option is a matter of personal choice for each trader. Both markets have their advantages and disadvantages. For example, while crypto trading can bring more potential returns and involves fewer fees, Forex trading provides more stability and less volatility.
Either way, both trading practices are extremely popular these days. And, veteran traders advise novice investors to diversify their investments in order to minimize risks and increase their earnings. So, you may not have to decide between trading Crypto or Forex when you are torn between these two options. You can simply try both of them and decide which one of them suits your needs and trading style the best.