Forex VS Crypto Trading, What is the difference?

  • Forex VS Crypto Trading, What is the difference?

    In the world of digital trading today it is no secret, if there is a type of trade, it is crypto trading and forex trading.

    Both require certain intelligence to navigate unpredictable market conditions so that traders get profits.

    Two types of forex and crypto trading today, many traders and investors are involved in it, using internet technology. What is the difference between forex and crypto trading? We will review it in this article.

    In his explanation, Alex Mashinsky, a CEO of Celsius Network, stated that crypto and foreign exchange both represent the value of the digital currency, and traders can buy or sell easily.

    Both crypto trading and forex have high volatility which creates opportunities to get short-term or long-term profits

    Bitcoin trader Crypto and forex traders are dominated by large financial institutions that have reliable trading algorithm capabilities, and retail players will find it hard to match them.

    Forex vs cryptocurrency market

    The forex market is the largest in the world with a daily trading volume of up to 5.3 trillion dollars, with assets traded in the currencies of countries around the world.

    As a global market, the forex market is heavily influenced by global economic conditions and also political issues within the country.

    Cryptocurrency is a separate market from the forex market, it is a digital currency that is traded peer to peer, with a market cap of up to 700 billion per day.

    The point that distinguishes digital cryptocurrency from a flat currency in the forex is that cryptocurrency is not backed up by the government. This is just a shadow market developed by the public.

    Meanwhile, the forex currency is backed up by the government with legalized regulations.

    Forex stands for Foreign exchange forex trading, for example, is buying Euros, while simultaneously selling USD, which in forex in the pair can be abbreviated as EUR/USD.

    Bitcoin is an open-source virtual currency (cryptocurrency) which was developed in 2009 by someone with a pseudonym Satoshi Nakamoto. 

    This currency is like the Euro or Dollar but is only available in the digital form. This bitcoin is saved in the Bitcoin wallet. This digital wallet has functions to send and receive bitcoins, with varying transfer fees.

    Like gold, Bitcoin uses a validation process through a process called mining. Miners use sophisticated computers to decipher complex mathematics to find new Bitcoin blocks, as a reward the inventor will be rewarded with some bitcoins.

    Prizes per 1 block found were initially 50 BTC, now 25 BTC / block. The number of Bitcoin has been determined since it was created, which is as many as 21 million BTC. This limitation is carried out to prevent inflation.

    The biggest difference between the forex market and BTC is that bitcoin is started and enhanced through global retail trade and not through institutional players while forex in it is dominated by institutional players and also central banks.

    The BTC market behaves differently from the forex market, where players in this type of trade are global networks originating from various traders.

    Forex requires skill and luck

    Fiat's currency in forex has the potential to be unlimited because each currency supply is determined by the country's monetary policy.

    Each state central bank usually regulates the supply of its country's currency to always be available through various policy mechanisms by setting interest rates and other policies that support the country's economy.

    This policy decision was made with a specific purpose towards domestic and global macroeconomic conditions and imperatives, and thus resulted in fluctuations in both supply and demand

    Currency traders need skills to look for opportunities by looking at the macroeconomic conditions of the country concerned with the aim of earning profits from the trade but also speculative.

    BTC offers a small fee

    BTC is traded on a peer to peer basis, thus transactions in crypto trading involve a small fee.

    This is because in crypto trading there is no intermediary in the classical sense, as is the case in the foreign exchange market where brokers facilitate transactions between participants, which often adds to costs.

    The Forex Market Has A High Liquidity Level

    There is no doubt that the forex market has high liquidity

    Progress in the field of technology encourages activities in foreign currency trading, as a result of increasing cross-border transactions and the availability of extensive trade facilities and infrastructure, making it easier for currency traders to gain access to forex trading.

    The forex market is the biggest compared to the crypto market, wherein the daily market there is a volume of transactions in millions of dollars

    But on the other hand, there are some similarities here with bitcoin, which and most of the trading volume can be attributed because the crypto market is open 24 hours 7 days a week which means the crypto market is never off and this can increase the volume of demand and supply.

    Only a small number of traders can make a profit

    A more volatile forex market, either for bearish or bullish, gives more opportunities to gain profit in trading.

    But Crypto traders face a difficult year in 2018, even though these digital assets have gone through the highest prices in 2017, but afterward, it's hard to get out of bearish pressure.

    And it is very difficult for short-term traders to get consistent profits.

    Advantages of Forex Trading

    Forex trading offers many advantages for traders that are not even obtained when traders trade BTC. Some of these benefits are;

    • Liquidity: The amount of forex space ensures considerable market depth with a variety of currencies that are popular in the world.

    • Diversity: Major, minor and exotic pairs are available for active trading.

    • Stability: In addition to extraordinary circumstances, foreign exchange rates are relatively stable. Large fluctuations are rare due to the amount of volume traded.

    • Leverage: Extensive leverage available in forex. Brokers usually offer 50: 1, 100: 1, and even 200: 1 or 1000:  1 for clients.

    Advantages of Bitcoin Trading

    In terms of liquidity and depth market, Bitcoin trading may be said to be not comparable with forex.

    However, BTC can provide quite a lot of benefits for traders who are actively trading BTC. Some of them are;

    • Volatility: the limited number of BTC chips creates ideal conditions for substantial daily trading and volatility spikes. The value of fluctuations greater than 5% is common.

    • Ease of entry/exit: All that is needed to enter the BTC market is online capital and cryptocurrency brokers or direct market access.

    • Minimal cost: Minimal transaction costs can even be zero. If using a broker, fees can be assessed at the time of purchase or sale of BTC. If you directly access the market, the costs can be very minimal.

    • Isolation: BTC does not face fluctuations caused by conventional currency issues. Geopolitical interests or the performance of the domestic economy do not determine value.

    Which is better forex or cryptocurrency

    In the forex, the government regulates the supply of money and adds new money with various policies and rules that are part of the government's efforts to maintain overall economic stability. This creates the possibility of an unlimited supply of currency.

    Whereas in cryptocurrency, Bitcoin, for example, is designed with a certain amount that after mining runs out it is not created anew. This allows the trader to grow and value the currency higher as demand increases.

    Forex trading offers high leverage which allows traders' income to increase sharply, but on the other hand, the possibility of risk is also higher. Some brokers even offer 1: 1000 leverage.

    In the cryptocurrency market, there are no institutions or banks that play a role in trading, and transactions in cryptocurrency require low cost.

    The Forex market is very liquid and no single institution can control the market in the long run. Traders can quickly place short-term trades to enter and exit the market.

    In the cryptocurrency market, if someone buys Bitcoin in 2009 and makes it an investment asset, it can provide a high return this year.

    Many investors are still optimistic about the future value of cryptocurrency, especially bitcoin.

    What affects the currency market is dominated by the country's fundamental news, inflation, the number of unemployed, and other economic indicators.

    In cryptocurrency fundamentals news about the growth of digital currencies can play a role in building customer trust.

    Then what is better bitcoin vs forex trading? Depending on your skills and in forex, some traders have done well and made forex a source of income. Usually, they are from consistent traders.

    Cryptocurrency in the long term is still the choice of some investors, with optimism that the value of the digital currency will increase because it is designed in such a way as to avoid inflation.

    Both market

    Both markets have negative and positive sides, both providing opportunities for investment and speculation. After all, they both offer high gain and high risk which have become commonplace.

    Today's forex brokers have started developing platforms to support crypto trading. Maybe you are interested in the broker in which one needs to choose forex brokers that accept bitcoin deposits.

    Both can be profitable if they are supported by the trader's knowledge in market analysis and determining the right timing for entering and leaving the market.


    In many ways, the comparison of trading in BTC with forex is like an analogy of apples and oranges. Both indeed involve electronic trading of various currencies.

    However, the size, structure, and behavior of each place are very different. Thus, they cannot be equated despite having some similarities.

    Of course, opportunity knows no boundaries. Many active forex traders have forgotten the relative security in the forex market and turned to markets that are considered more potential, namely BTC and other cryptocurrencies. However, the decision of whether to trade forex or BTC depends on individual goals, risk tolerance, and resources.