Forex vs Crypto: Which One Is Best For You? – Lubna.io
Financial trading completely changed when Satoshi Nakamoto published Bitcoin as a revolutionary currency back in 2009. It was both a controversy and a game changer to how do we perceive currency as it was completely virtual with no physical form at all. Most of all, it challenged foreign exchange and raises the bar to how the game plays. Players and investors continuously come in to the market and strengthen cryptocurrency’s core through time. Not to mention the birth of ethereum and altcoin. But is it just the same? How does cryptocurrency compare to the traditional foreign exchange?
What’s the difference?
The basic principle is almost the same, you buy your assets at low price and sell them when the values grow exponentially to profit. Both are also playing with currencies, with the only difference of the completely visual aspect of cryptocurrency. Trading cryptocurrency is also a lot more different compared to trading forex. If you are a forex Trader actually deciding to move to the crypto market, you might notice how different the trading behavior is even among the most mature Traders.
Some might argue that forex is more secure than cryptocurrency because the currencies were all legal tender and supervised by central government. But the very same reason is also the main appeal of cryptocurrency. As some of you may have already known, cryptocurrency has the upper hand when it comes to privacy. It is not governed by any bank or government meaning that your transaction goes to the recipient without being mediated by any third parties. Nobody can track your transactions, and that is more privacy than any bank in the world can provide.
Which one is more risky?
Both provide great prospect of outstanding profit. Forex is and always has been the most preferred way to trade and the game shows no sign of stopping anytime soon. It allows novice Traders to start very moderately and since forex is untaxable, the method proves to more pleasant to some people. Cryptocurrency, on the other hand, has a relatively new market that brings more excitement to the table.
As a result of its youth and niche approach, cryptocurrency is continuously attracting investors and Traders rapidly every year, thus making great promise for its longevity and relevancy in the future. On the downside, cryptocurrency can be tremendously volatile from time to time. It is important for Traders who were used to forex to really adapt to the market and shape strategies.
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Which one is more pricey?
Because of the completely different method and behavior, both forex and crypto will require additional fees aside from your investment. For forex, there is a little more ease because it is not taxable. But you need to be aware of their trading fees and the cost of each trade you made. The cost of eachtrade, for forex, will not be available for you to see until the trade is completely complete. Not to mention other fees like cost of the spread and overnight funding.
The additional fees you might want to be aware of when trading cryptocurrencies include the Exchange platform fees, fees of each trade, deposit or withdrawal fees, and provider or online wallet fees. Each Exchange platform will have their own way of calculating each fees but it also depends on how much you trade.
What are the pros and cons of trading forex?
Let’s start with the pros. You only trade forex on weekdays, that means you can completely have your mind off trading on weekend. Secondly, you can optimize your profit by setting the leverage of your trade. And lastly, forex is the most liquid market in financial trading. You can open and close positions anytime you want with speed.
On the other hand, forex is not recommended for small trading banks, it is more ideal to groups and hedge funds. It can also be just as volatile as cryptocurrency from time to time. And because forex closely relates to the central government, politics play in hand to which currency dominates at certain time.
What are the pros and cons of trading cryptocurrency?
Here’s the exciting part. Cryptocurrency’s value can and will rise exponentially from time to time. Although it is very unlikely that a rise as high as it once had in 2017 will happen again, the increasing number of investors and how its legality is more and more accepted by central government do hold some appeal to the long-term. Just like forex, you can also set your preferred ratio of leverage, thus giving you more flexibility.
The cons of cryptocurrency include its short of history, extreme volatility, and unpredictable market. You need to constantly reeducate yourself on how things work when you trade cryptocurrency.
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Published at Mon, 30 Sep 2019 02:51:40 +0000
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