Is Forex Trading Still  Profitable – Crypto Vs Forex Trade

Rohan Mathew

Updated on:

The question has been hanging in the air for quite some time – is forex trade still profitable? Which market is better, crypto of Forex? How do you start, and why? Are regulations going to be implemented for digital currencies, and what about it? It is a deep subject, but when you start unraveling, there is not much to think about. Both markets are very similar, but the additional assets and regulations (forex), versus the crypto market where everything is still kind of on the loose, can be more attractive. Let’s find out what is a perfect match for you!

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How does Forex Market function?

The surprising fact about the forex trade is that its trading volume is around $5 trillion daily, according to FinanceBrokerage. They are decentralized, but they comprise various banks, businesses, etc. which all make international exchange currencies trade. The market is fast-paced and attracts traders worldwide because of its volatility and opportunities to make lots of money. This all depends on the current economy and politics. Because of this, many traders are well-educated about the economic calendar, daily events worldwide, and business reports.

What does the crypto market look like then?

The Crypto market is a bit younger, but the main difference is that they are trading digitally as well, but only with digital assets. We can say it all started back in 2009 with Bitcoin. However, the first exchange opened a few years later, and many different cryptocurrencies appeared, giving a chance for the crypto market to develop its trading ecosystem. They are trading 24/7, also providing multiple opportunities for making money through exchanges. The difference is, their regulations vary very much depending on which party of the world you are dealing with a specific cryptocurrency. Their current exchange volume is around $100 billion a day. Crypto markets depend less on world events but are much more prone to scams. If you are not into news, paying attention to world events isn’t as necessary as knowing how to read charts and do technical analysis.

Spot the similarities

The most obvious comparison is that both markets are working around currencies, unlike the standard stock market. Both are fast-paced thanks to their digital space, volatile, and anyone can trade. You can be an individual interested in earning a bit more, having a passive income, or a large business wanting to profit or make one. The only upper-hand in the digital world regarding stocks has the crypto-market since trades can’t be made outside the internet.

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Main differences between the two

  • OTC (Over-the-counter) tradings; both forex and crypto trade offer this way of trading, but there is a significant difference between them. OTC does offer global liquidity, but trades often must be facilitated by a broker. It is possible to get an account that gives direct access to the market, but this is highly regulated. However, going through a third party is more straightforward for many investors and traders, but the broker that’s working for you will also take a cut. The exchange on the cryptos exists but acts by buying and selling, and it is entirely autonomous. They mostly have fixed rates to their trades, and there is no negotiation (that can be bothersome). This makes the whole trading process simpler, but someone with central authority will surely follow your activity. The forex market trades on global currencies, which means that governments and banks can affect their value and regulate them. It will always depend on global politics and how nations act against each other.
  • Cryptocurrencies are relatively new, so none of them has connections to a bank or a nation. We can only speculate on their value, the market is competitive, and there is an ongoing thing where new cryptos appear almost every day. The digital characteristic gives the crypto market endless possibilities because nearly none of them is regulated. It’s still not sure how the law is going to deal with it. Again, many significant investments come into the crypto market since nobody is controlling your actions.

How to choose the right one for yourself? 

It all comes down to your preferences. To be more precise, what kind of trading way is more suitable for you. While Forex can offer you a broader view and a safer environment (plus regulations), the crypto market can be extremely unpredictable, making it fun and fresh.

Cryptocurrency trading is a higher risk and gives you an adrenaline shot from time to time. What is very different from traditional trading is that the chances of massive returns are more likely than those of conventional currencies. See what sounds better to you, and start getting educated about it, so you can dive into it as soon as possible. Education is the key to every exchange market, whether it be Forex or Crypto. That will make you more confident, and you will be able to trade smartly.