Comparing the Forex market & Cryptocurrency; which one is better?

Forex & Cryptocurrency History

The beginning of the forex market dates back to 1971, and with the advancement of technology since 1998, its growing trend has begun, and now many enthusiasts and professionals worldwide are engaged in trading in Forex. Forex is an abbreviation of "Foreign Exchange" which means the exchange of foreign currencies in which the money of different countries is traded. There are more than 170 currency pairs in the forex market, with professional traders trading mostly on major currency pairs (one side of the trade is the US dollar). The main players in the forex market are financial institutions, banks, large commercial companies, etc. Less than 5% of the market is retail traders who trade currencies of different countries for business purposes and also to earn profit and reach more dollar income.

On the other hand, the cryptocurrency market has less history than Forex, so in 2009, following the launch of the largest cryptocurrency, Bitcoin, cryptocurrency market trades began. Two years later, the first Bitcoin digital exchange was created, and several cryptocurrencies, such as Ethereum, Ripple, Tether, etc., emerged after that. Many enthusiasts have counted on the growth of cryptocurrency technology and consider some cryptocurrencies to be the money of the future, which is why cryptocurrencies have been welcomed widely in recent years, the price of cryptocurrencies has increased, and their market value has multiplied. In addition, based on factors such as technology and network, code security, and the decentralized network of cryptocurrencies, etc., an inherent value for the cryptocurrency market is considered. One of the things that has increased the attractiveness of the cryptocurrency market is its decentralization. That means no group or organization controls it, and there is no government interference in the market process.

Besides the differences, Forex and cryptocurrency have many similarities, so it is difficult for many users to choose which market to focus on and be more active. Of course, people should choose one or both markets based on their trading strategies.

Further in this article, we have discussed the similarities and differences between Forex and the cryptocurrency market, so that by comparing the features of both markets, we can reach the answer to the question and make a better choice in the end.

Comparing the Forex market & Cryptocurrency

The forex and cryptocurrency markets are two significant financial markets, each having unique features. Below we compare some of these features:

Market Extent

The Forex market is the largest financial market in the world, with a daily trading volume of more than 6 trillion dollars. On the other hand, the cryptocurrency market is growing, and with the increase in the number of cryptocurrencies and their use, the trading volume in this market has also increased.

Working Hours

The forex market is open 24 hours and five business days a week (Monday to Friday). But the cryptocurrency market is active 24/7, 365 days a year.

Read More: Forex market opening hours

Affecting Factors

The forex market is affected by factors such as central bank policies, the economic state of countries, and significant economic and political news. In contrast, the cryptocurrency market is influenced by technology, innovations, regulatory laws and regulations, and investor demand.

Read More: Fundamental analysis in Forex

Risk & Return

The cryptocurrency market usually has more price volatility than the forex market, which can be seen as an opportunity for a higher profit or risk. The forex market is relatively more stable, but very high returns are still possible.

Trading Tool

The Forexmarket is mainly traded based on currency pairs, while the cryptocurrency market includes various currencies, including Bitcoin, Ethereum, Ripple, and others.

Ultimately, both markets offer unique investment opportunities, and the investment decision depends on the individual investor's goals, risk tolerance, and knowledge.

Which one should we choose between the Forex & cryptocurrency markets?

 

Following the emergence and development of technology and the Internet, traditional financial markets have given way to new markets. Among the new financial markets, we can mention the forex and cryptocurrency markets, which have been welcomed highly by people worldwide for several years.

The main goal of people entering the financial markets is to make money and achieve a continuous profit. They are also looking for a market they will profit the most from. Therefore, people are often torn between the forex and cryptocurrency markets. Further, we will answer the question "Forex or cryptocurrency; which is better?" by comparing these two markets.

As you know, Forex is an international market where a country's currency is traded based on another country's currency, and it has a longer history than cryptocurrency. On the other hand, the cryptocurrency market's risk and volatility are greater than forex, and according to some fans and enthusiasts, cryptocurrencies' high volatility is one of the main reasons for the attractiveness and popularity of this market. The forex market has the most liquidity and trading volume compared to other financial markets and is considered one of the most money-making financial markets. However, the cryptocurrency market has not fallen behind the forex market, and now became one of the fierce competitors of Forex.

It is worth mentioning that we cannot answer the "Which is better between forex and cryptocurrency?" question accurately. It depends on several factors that you should pay attention to. Below are some of these factors:

Risk Tolerance

Cryptocurrencies tend to have more price volatility, which can attract investors looking for high returns. But this issue increases the risk. In contrast, the forex market is often more stable but does not guarantee high profits.

Trading Hours

The forex market is open 24 hours and five business days a week (Monday to Friday). In contrast, the cryptocurrency market is active non-stop & 24/7, 365 days a year. If you want more time spans to trade, the cryptocurrency market can be a better option.

Learning Extent

The forex market is the largest financial market in the world, and it is favored more among investors. Although the cryptocurrency market is growing, it has not yet reached the level of forex market penetration.

Read More: What is a Currency Pair? (What is traded in Forex?)

Affecting Factors

Global economic policies and financial news influence the forex market. The cryptocurrency market is affected by different factors, such as technology, regulations, and investor confidence.

Ultimately, this decision depends on your taste, risk tolerance, investment goals, and understanding of both markets.