If you've been investing in the forex market for the past few years and you are intrigued about what is going on on the crypto side, you should give it a look. People with a solid forex background could use some of the skills they've amassed to trade crypto and get very good with them.
You should know, however, that while crypto and forex share some similarities, they have some important differences that you need to be aware of. This will help inform your decisions and strategy and avoid major mistakes that many people make when they first switch from forex to crypto. Let's take a look at some of the areas where crypto and forex are similar and where they're different.
The Similarities Between Forex and Crypto
One of the things forex investors will love about crypto is the fact that the markets are open 24/7 contrary to stock markets and mutual fund markets that have very strict trading times. This level of access allows people to capitalize on price movements in real-time and make good profits if they use a sound strategy.
Another thing that makes crypto easier to pick up for forex experts is how both markets are mainly driven by supply and demand. Trades in both markets are very easy to make too, and both assets can be traded online with minimal interference.
The Differences Between Forex and Crypto
The main difference that most people will notice when they start trading crypto is how volatile the markets are. This makes them riskier but gives people much more potential for mid-term and short-term profits. No normal currency could have the price action that bitcoin had over the years, and, while it has been pretty low at times, the highs it has seen cannot be replicated anywhere in the foreign exchange.
So, if your ultimate goal is to make money in the short or mid-term through speculation, crypto is the way to go. Search for reputable exchanges that will allow you to capitalize on these movements with smooth action and accurate prices. Also, look for a solid crypto converter that will allow you to figure out the price of different cryptos in fiat fast. This is what will allow you to spot the real opportunities and cash in.
Another major difference between cryptocurrencies and forex is the fact that cryptocurrencies are independent projects while currencies are attached to countries and their economies. This means that you will need to look at very different indicators when looking at both assets.
Forex vs Crypto - Which One Should You Pick?
Well, it depends on what you're trying to accomplish and your profile as an investor. If you trust currencies and feel more comfortable with how they work, then go for them. But you have to know that very few people make a great profit with Forex because of how steady the markets are.
If you want something that will allow you to make great profits in a potentially shorter period and behave a bit more like stocks, crypto is the best choice. You do have to be willing to take the risk that comes with the possible reward, however.
The foreign exchange market and crypto markets both have major advantages that should be considered by all investors. If both sides interest you, know that nothing is stopping you from investing in both and seeing for yourself which one fits your profile the best.