CryptocurrencyVs Forex: A comparison
Even since the first bitcoin was successfully mined in the year 2009, the cryptocurrency trading has taken a leap and created a new sensation in the market. The blockchain technology behind the cryptocurrency transfers is fresh and various financial sectors like banks are taking steps to incorporate the innovation in the conventional bank transactions. Learn more about this technology online. Cryptocurrencies are regarded as digital or virtual assets that use cryptography to secure transactions. Bitcoin is the most common and highly valued digital currency at the moment.
FOREX, which is a foreign exchange market facilitates currency trading and exchange. FOREX trading too flourished in recent years due to the technological advancements and the huge profits it promises. It is a global market where the value of one currency is compared to that of the other, in order to determine which one should be traded.
FOREX is so far the largest market place where a huge number of traders participate on a daily basis. Thanks to the Internet, for making remote access possible. As the number of active traders is maximum, forex offers high liquidity and pricing stability. The last 20 years has been massive for currency exchange.
In contrast, cryptocurrencies are minuscule market compared to the trillion dollar worth FOREX. Bitcoins are mined only in a smaller volume and the digital currency’s total count is restricted to 21 million. Yet, BTC is younger than FOREX and we shouldn’t forget that the robust growth of the cryptos in the last decade is multiple times faster than that of the growth of forex market in the same time period.
The cryptocurrency market operates 24×7, whereas it is 24×5 for forex trading. But the weekend break doesn’t make a huge impact on the price differences among the world currencies. This is not the case with the cryptocurrencies. They are highly volatile that time can make a huge difference in the value of the virtual currencies and one may even end up losing all the investments in a shorter span of time.
Effects of inflation:
The changes in global economic trends and inflation greatly influence the forex market. To be a successful forex trader, extensive knowledge about currencies and intelligence are indispensable. Inflation doesn’t have a role when it comes to Crypto trading. Even one can rely on automatic trading software to perform bitcoin trading.