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May 2023
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Forex and cryptocurrency are large financial markets popular for making money online. Millions of people use the two methods daily. Here, we will discuss the question many traders ask - Crypto vs. Forex, which is more profitable? We will also compare and establish differences between the two. What is Forex Trading? Forex is foreign exchange and involves trading in one currency for another to profit from their differences in value. It is a global exchange market between currencies with high trading volume and liquidity. Each day a total of $6.6 trillion in transactions occurs, comprising over 150 government-backed national currencies. Moreover, the market is regulated around the world by different jurisdictions. The regulators are government authorities who oversee Forex trading activities. One can trade through a forex broker or online trading platform like Valiant Markets. What is Cryptocurrency Trading? Cryptocurrency trading involves buying and selling virtual currency using blockchain technology. The virtual cryptocurrencies are Bitcoin, Ethereum, Litecoin, Solana, and many other tokens of different blockchain networks. The crypto market is subject to less regulation and protection than Forex. However, they are built using blockchain technology, and the transactions are recorded in blocks via a complex and technical process that makes it harder to tamper. Differences Between Crypto and Forex Market Size The crypto market cap is $2.8 trillion, with a 24-hour trading volume of $124 billion. Even though cryptocurrency prices have exploded, the trading volume of Forex is still high, with a total of $6.6 trillion in transactions taking place daily. Liquidity Liquidity means how easy it is to exchange one financial asset with another, and Forex is more liquid than cryptocurrency. It is true for the major currency pairs like EUR/USD, which accounts for 24% of total daily forex volumes and benefits from almost constant, uninterrupted demand. However, cryptocurrency trading is a bit different. Certain assets on the market offer high liquidity, like Bitcoin, so you get a low bid-ask spread and reasonable prices to trade coins. However, if you choose coins with less trading volume, you may be unable to trade those coins at the desired price. Volatility The crypto market is highly volatile compared to the forex market, which provides an opportunity for those looking to make huge profits quickly. The currencies with low trading volume frequently fluctuate, while those with higher market capitalization and trading volume remain stable. The Forex market has low fluctuation, which limits the opportunity to make large profits and controls investment risks. Available Assets The difference between the number of assets is a significant difference between the Forex and the crypto markets. Despite the enormous volume that moves the forex market, the tradable currencies are limited. On the other hand, more than fourteen thousand cryptocurrencies are currently available. These currencies involve Bitcoin, Ethereum, Solana, Binance, Cardano, etc. Market Hours Forex and cryptocurrency trading differs in the number of trading hours involved. The Forex market is open on a 24-hour basis every day from Monday to Friday, and every currency has a session in which it is most active. On the other hand, cryptocurrency trading is offered daily, 24 hours a day. Profit Potential A high level of fluctuation in the crypto market increases the potential to make huge profits. However, other factors, like the investment amount, influence the profit potential. If you make a considerable investment, you will enjoy more significant rewards. However, you must diversify your investment wisely and stay updated to trade cryptocurrencies. Although the forex market also offers an enormous profit potential, it is more relative to the investment amount. Venues for Trading Forex trading is mainly done through brokers or online platforms like Valiant Markets. The broker is an intermediary, allowing retail traders to speculate on currencies and their price movements. Moreover, Valiant Markets has several different trading accounts, each providing services and features tailored to traders' trading objectives. Visit the page and discover the account that is right for you. On the other hand, crypto trading is done through decentralized and centralized exchanges, requiring electronic devices with the internet to connect. Some traders use centralized exchanges to take advantage of a secure environment with high liquidity. In contrast, others use decentralized platforms to keep themselves anonymous and trade tokens without involving any third party. Crypto vs. Forex - Which is More Profitable It is a common question that many newbie traders have. Well, it is difficult to answer as the number of profits depends on the traders. Some find the forex market highly profitable, while others have succeeded in the crypto industry. However, in the long term, cryptocurrencies have been more profitable. Pros and Cons of Crypto and Forex Both crypto and Forex have pros and cons. In Forex, the pros include the regulated industry and having fewer scams, which results in more stable pairs and predictable results. The cons include less potential for massive short-term gains, higher entry barriers, and easily tracked and taxed yields. In crypto, the pros are anonymity, high growth potential, low fees, and low entry barriers. The cons are no government insurance of accounts, less security, higher risk, and scams. Why is Forex Trading Better? There are various reasons why forex trading is better than cryptocurrency. Firstly, the Forex industry has existed for decades and is more stable than cryptocurrencies. Secondly, it is less prone to market risks and has a higher volume than cryptocurrencies. The daily average of Forex is more than $5 trillion, which is significantly higher than the total market of cryptocurrencies. Conclusion Now that you know how crypto and Forex trading compare, you will find Forex online trading is much easier to understand and is less volatile. Moreover, trading in currencies can add some much-needed diversification to your portfolio. So, open a forex trading account today with Valiant Markets and start your journey to win big profits. Valiant Markets is an award-winning, user-friendly platform offering 1000+ assets and professional training to help you learn the realms of forex trading. Read More: Valiant Markets - Taking Your Trading Skills to the Next Level
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