What’s the difference between cryptocurrency trading and Forex trading?
The basic trading concept between the two is similar but there are several differences worth pointing out.
Forex is, without a doubt, the largest currency market in the world. It has been around for longer and is therefore bigger than cryptocurrency trading. Forex traders make profits by gauging the health of different pairs of fiat currencies and exploiting the difference in exchange rates. The more a currency’s value varies, the bigger the profit margin and the higher the risk too. Crypto trading follows a similar concept. Traders basically exchange different types of cryptocurrencies such as Bitcoin and Ethereum in a bid to make profit.
Trade and Profit Differences Between Forex and Crypto Trading
The major difference between Forex and trading in cryptocurrencies is the fact that by their very nature, digital assets are more volatile and therefore more unpredictable than traditional fiat currencies. This is because the price-driving factors for cryptocurrencies are completely different from those of Forex currencies.
Another key difference between the two types of trading is that while Forex is regulated by each currency’s central bank, most cryptocurrencies such as Bitcoin are completely decentralized. They are not regulated by any central bank, government, or authority.