At its core, any comparison between the forex market and the cryptocurrency market boils down to old and new ways of thinking about money. It may seem difficult to correlate currencies backed by countries with those by coding. But people are creating real buying power in their day-to-day lives learning both types.
If you’ve ever had forex vs. crypto thoughts rolling around in your head, read on for some context that could help inform your decision.
Crypto vs Forex Similarities
Before we move into the differences between crypto and forex, let’s see why these markets may not be so different after all.
Forex and Crypto Play Together
The most important similarity between crypto and forex is that they now hold value relative to each other. You may not believe in Bitcoin or Ripple as a legitimate currency, but forex exchanges do. The Chicago Board Options Exchange (CBOE) also believes in crypto enough to offer options contracts on them.
Although the CBOE only offered crypto futures contracts from December 2017 until March 2019, the Chicago Mercantile Exchange (CME) currently offers bitcoin futures. You can also trade contracts-for-differences (CFDs) of reputable cryptocurrencies on platforms like eToro just like CFDs of forex currency pairs.
Decentralization
If you’ve read anything about crypto, you’ve heard about the concept of “decentralization.” All that means is there is no central regulation on the market. Here’s a little secret: The forex market is also decentralized. No, FOREX.com is not a central regulatory body for forex, just a well-named.
Which Market is Right for You?
The forex and crypto markets share characteristics but they couldn’t have a more different risk-reward dynamic. If you want a smooth, liquid market that rewards patience, forex may be your game. If you’re looking for pure growth, then you may want to look into cryptocurrencies. Consider talking to a financial advisor about forex versus crypto, and never speculate in any market with money that you are not willing to lose.exchange!
What is more profitable, crypto or forex?
It’s not a matter of profitability but rather liquidity and volatility when it comes to crypto vs forex. Forex can offer more liquidity while crypto is usually known for being more volatile, which can mean a higher reward with a higher risk.