Sarah Jay is an Australian content writer from Melbourne. Her amazing writing skills give a boost in her career.
Trading in cryptocurrencies has grown in popularity in recent years, becoming increasingly mainstream as we witness a "digital" gold rush of new technology and creativity. The overall market value of cryptos has surpassed $3 trillion due to increased digital currency investment. Traders are concerned about missing out on substantial gains due to the speculative rise of blockchain technology and many cryptocurrencies. This is in stark contrast to the forex (FX) markets, where currency exchange values barely vary. The use of leverage in Forex is what makes it appealing to traders. Both cryptocurrency and forex trading have similarities and differences. The purchasing and selling of digital assets such as cryptocurrencies, tokens, and NFTs is known as crypto trading (non-fungible tokens). Forex trading involves exchanging one fiat currency for another in the hopes that the currency's value will grow, allowing the trader to profit. Cryptocurrency and fiat currency prices are driven by similar mechanisms, such as supply and demand. The forces that drive supply and demand in crypto and Forex, on the other hand, are vastly different.
Cryptocurrencies, for example, are based on blockchain technology, which is a distributed and decentralized ledger. As a result, vast sums of money are being invested in this new infrastructure, and demand for cryptocurrencies is skyrocketing. On the other hand, Forex trading has been around for decades, effectively putting one economy against another in the hopes of increasing the value of the currency you've purchased. The forces that drive currency supply and demand are enormous, and any significant imbalances can considerably influence the global economy. Even though cryptocurrencies such as bitcoins and NFTs are popular nowadays and have been purchased by some of the world's most well-known celebrities, including Justin Bieber, Lionel Messi, Jimmy Fallon, and Snoop Dogg, however, many experienced business people still consider Forex to be the best investment because it helps the world's economy grow. NFTs, on the other hand, are just bought because of the trend.
"Don't make friends with the trend; make friends with each candlestick."
― Vivek Nair
Many successful traders often encourage people to start investing in Forex rather than NFTs because NFT is just a rising trend. For example, Devin Sran @devinsran, a 20-year-old forex millionaire, is a well-known figure in the market. The forecaster is living proof that hard effort pays off and that you can be financially self-sufficient at a young age. He has recently launched his own forecasting company to help people with the prediction of foreign currencies.
Cryptocurrency has a market capitalization of almost $3 trillion. The first $1 trillion in combined valuations took 12 years to develop and another 11 months to add the next $2 trillion. The total value of the cryptocurrency market is rapidly increasing. However, determining the value of Forex, on the other hand, is more complicated. Economists can estimate the global economy's overall weight, estimated to be $80 trillion in 2017. Devin feels that the only reason NFTs are so valuable is because of the individuals who value them and that in NFTs, one person must lose all of their money for the other to profit, whereas in Forex, everyone is getting rich, profiting greatly. The Bank for International Settlements (BIS) calculates the global foreign exchange trade volume every three years. The most current report, released in September 2019, revealed that FX trades were $6.6 trillion per day, up from $5.1 trillion three years before. Forex trading is well-established, with trading methods and mechanisms in place for quite some time. Although Bitcoin has been available for 13 years, getting it has only been more manageable in the last few years.
There were miners, retail clients, and a few small centralized exchanges in the early days of Bitcoin. Hundreds of coins are currently available on these exchanges. Furthermore, in the early days of crypto, the ability to hold crypto on behalf of another party was not figured out until MicroStrategy (MSTR) announced its first Bitcoin acquisition in August 2020. The door was opened to businesses interested in using cryptocurrency in their treasury strategies. This opened the door for many crypto "whales" to join the fray. Bitcoin and Ethereum are the two most popular cryptocurrencies among institutions. Banks swap currencies with forex trading and have done so for decades since international firms need to pay employees in other nations. Banks conduct business in "yards," or one billion pieces of cash. Smaller forex dealers have worked out how to use technology to purchase and sell currencies while avoiding exposure to larger banks in the last 20 years. As you can see, one of the most significant differences between the evolution of crypto and forex trading is that crypto was designed with the small retail trader in mind, whereas FX trading was designated for giant institutions. Larger institutions were finally allowed to participate in crypto, while the "little guy" was given access to currency trading.
Market newcomers must learn the vocabulary specific to that market and the threats they might face. Both Forex and cryptocurrency utilize words that can be intimidating to new traders. It may take some time to grasp such terms. The dangers of Forex and cryptocurrency are slightly different. The risk of using too much leverage while trading Forex is the most common reason traders lose money.
That's why many experienced traders, such as Devin, always advise newcomers to seek advice from more experienced traders; based on his own experience, he was always learning from the best people out there and making money by learning from their decisions and knowing what to do and what not to do. But, on the other hand, the volatile nature of crypto markets is often what hurts traders. Moreover, Crypto exchanges have gotten better at making their platforms user-friendly — given that the trader learns the accompanying language — due to the relative difficulties of onboarding new consumers in the past.
To summarize, both Forex and cryptocurrency are incredibly volatile, not for the faint of heart. Consider each market's specific characteristics and risks before deciding whether or not you're ready and whether one is best for you. Depending on how much danger you're willing to take. Whatever path you select, be patient and continue to learn more about the profession. Devin began at an early age and was always eager to learn, and now has everything he ever desired, from a house to a collection of luxury automobiles.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Sarah Jay