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The following article was published in our article directory on March 3, 2022.
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Article Category: Computers and Technology
Author Name: Michael O'Reilly
There are similarities as well as differences between cryptocurrency and forex trading. By definition, cryptocurrency trading is the buying and selling of cryptocurrencies, tokens, and non-fungible tokens (NFTs). On the other hand, forex trading is the process of swapping one fiat currency to another expecting that the currency will increase in value, which can be turned into profit. If you have been trading forex for a while and you want to know if your experience may help you with crypto trading, then this article is for you. Listed below are some considerations on crypto vs. forex to help you choose.
Crypto vs. Forex: Market Landscape
Market valuations for both fiat currencies and cryptocurrencies are the same, like supply and demand. There are other considerations .
To begin with, crypto trading uses blockchain technology which involves a decentralized ledger resulting in many investments going into this new infrastructure, increasing the demand for cryptocurrencies.
Forex trading has been in existent for decades. It pits one economy against another expecting that the value of the currency will increase.
The basic mechanisms used by industry insiders to analyze price charts are the same for both, but much is considered in terms of volatility since the crypto market is more volatile than the forex market.
Market Capitalization
Crypto�s total market capitalization is around $3 trillion. It was only after 12 years that the first $1 trillion combined valuations were achieved, and another 11 months for the next $2 trillion. Its total market value continues to skyrocket.
With forex, it is more challenging to determine its market valuations. Economists can estimate the total value in terms of the worldwide economy, for example in 2017 alone, the forex market was at $80 trillion.
The Bank of International Settlements (BIS) estimates the world�s trading volume in forex every three days. Their most recent report was in September 2019. Forex traded $6.6 trillion daily, that�s about $5.1 trillion increase from the last report.
It is harder to get a conclusive figure for trading volumes in crypto because it is decentralized. The estimate is about $100 billion to $500 billion daily.
Forex is most established because its trading systems and mechanisms have been used for a long time.
Crypto vs. Forex: Which is safer in terms of regulatory perspective?
Many traders consider forex as safer than crypto because the crypto market has no central authority making it highly volatile, hence wild market swings are highly likely. In addition, the crypto market is less liquid. It also has lower trading volumes which makes it more difficult to enter and exit.
Forex traders typically have more leverage, allowing them to easily go in and out of large trades.
Which one is more beginner-friendly, crypto or forex?
Beginners in trading need to learn even the terminologies specific to that market, the risks, and the platforms to be used. For beginners, both forex and crypto use jargon that sounds intimidating, understanding them will take time. The risks may be different, though. With forex, the risk is too much leverage tends to cause traders to lose, while with crypto the volatility results in losses.
Crypto exchanges have improved a lot in recent years at making their platforms more user-friendly.
Keywords: Trade Crypto’s , Crypto vs Forex, Systematic Trading, Crypto Trading Strategies, One Core Program Course Training, Ezekiel Chew, Asian Forex Mentor
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