Forex or Bitcoin can be used as an investment tool or for profit. These two financial tools have started being used by many people worldwide.
Bitcoin Forex Trading aim to make a profit, and these two trades have their differences and advantages. In this article, we will review what Bitcoin trading is, Forex trading, the difference between the two, and the difference between Forex and Bitcoin trading that you must know.
Bitcoin trading is a buying and selling activity that uses Bitcoin as a trading tool. Bitcoin is often referred to as a cryptocurrency, digital asset, or digital currency. Who will carry out Bitcoin trading activities on cryptocurrency exchanges?
Forex trading is a trading activity involving currencies from various countries. Forex is short for Foreign Exchange (foreign exchange or foreign exchange). For example, you buy and buy Euros (the leading European currency), and at the same time, you sell USD (the American currency). However, this is not like a money changer that only exchanges money physically for transaction needs in different countries. Forex trading aims to make a profit online on a dedicated Forex trading platform.
Difference between Forex and Bitcoin
In Bitcoin trading, price fluctuations are so fast and significant; these fluctuations can have a difference of up to tens or hundreds of dollars in a day and can occur several times. It does experience price fluctuations but not as drastic as Bitcoin.
Commonly used currency pairs, such as EUR/USD, GBP/USD, and others, experience price changes that are not as large as Bitcoin trading, which is only less than one dollar a day.
This means the profit potential in Bitcoin trading can be much more significant compared to Forex trading. However, you need to understand that the risks of trading Bitcoin are also much more effective than trading Forex.
Leverage trading Bitcoin trading Forex
Leverage in forex trading is more significant than Bitcoin. In Forex, power can start around 1:100 to 1:1,000 or more. But in Bitcoin, Forex brokers will provide power in the range of 1:2 to 1:20. This is done because Bitcoin trading is riskier than Forex, so the leverage is not too significant.
Bitcoin Trading and Forex Trading Market Capitalization
Regarding market capitalization, Forex is the largest market in the world. Almost all countries use or trade Forex every day. Moreover, the development of internet technology makes Forex trading multiply.
Average daily Forex turnover jumped from more than US$1 trillion in 1998 to US$5 trillion in 2016. The magnitude of this increase relates to the public interest in the seven major global currencies, namely USD, EURO, YEN, POUND STERLING, AUSTRALIAN DOLLARS, CANADA DOLLAR, FRANC.
Meanwhile, because BTC is still new, it is only traded on a much smaller scale. With the Bitcoin supply limited to a maximum of 21 million keeping.BTC is small compared to the Forex market, which is worth trillions. However, in terms of value, Bitcoin trading is desirable to investors. In 2017 alone, the worth of BTC rose to more than US $ 4,000, with a total market value of more than US $ 70 billion.
The regular daily BTC market turnover has also exceeded US$1 billion. Therefore, even though it still has a lower market capitalization than Forex, from investors’ perspective, BTC will still have an increase and is a promising investment tool. Moreover, the amount of profit offered can make traders interested.
Bitcoin prices are also not always affected by news that has to do with fiat currencies that have decreased or increased. The rise and fall of Bitcoin cannot be seen only by circulating information. In addition, the value of Bitcoin is not controlled; everything will depend on the performance of traders actively trading and playing the supply of Bitcoin in the market.
This condition is different from Forex, which is very dependent on circulating information, whether it is about politics, economics, disasters, wars, and so on. Moreover, if there is big news in a country with a strong economy, the price of its currency can go up or down. This can be an opportunity or a loss for Forex traders.
Of course, the purpose of investing is to get a profit from the capital you put in. The gain of the two investment instruments is obtained from the difference between the buying and selling prices. Bitcoin uses price fluctuations that make the price of Bitcoin soar at any time. Then if you invest in Bitcoin, you don’t need to have significant capital compared to Bitcoin.