Although the cryptocurrencies have been in the public eye for almost a decade now. Since the huge spike in Bitcoin value of mid-2017, things have gone absolutely crazy. Although the price has dropped since and seemingly stabilized, no one really knows what to expect from cryptos.
Many people are discussing the growing number of digital currencies, but most of them know nothing, or next-to-nothing about how it all works. Perhaps the best way to explain how the crypto (we’ll stick to Bitcoin here) world ticks is through comparison with the Forex market, which is a tried and true, veteran market.
Like the Bitcoin market, Forex deals in currency trading; foreign currencies in particular. Contrary to the popular belief, the cryptocurrency market isn’t alone when it comes to the benefits of a relatively recent increase in worldwide connectivity. There’s a simple reason behind this: the vast majority of large transactions is global and internet-based nowadays, and the need for a market that deals with foreign currencies has never been bigger.
Forex positives and negatives
Forex is much more stable than the Bitcoin market, but things are a bit more complicated here. For one, you can’t jump into forex trading as someone without any previous experience – Forex trading does require skills, knowledge and constant research in order for you to stay updated with this trading world. However, this isn’t necessarily a bad thing – one could engage in this type of trading with a degree of uncertainty, although a certain amount of dedication and research is required.
Forex trading on a large scale can be incredibly profitable, but not without making solid investments. Another general upside of trading in Forex is that you can actually get expert assistance here, whereas with Bitcoin, chances are that you might be just as experienced as people who claim they are actual experts.
Bitcoin is a digital currency. Before you roll your eyes, let’s explain what this exactly means; it means that Bitcoin works like any “typical” currency, such as Euro, Dollar, etc. but with one huge difference: this is the world’s first modern currency without any government authority backing it. In layman’s terms, its value is derived solely from its popularity – that is, from the people purchasing it.
Bitcoin positives and negatives
The main reason why people who are inexperienced (and unskilled) in crypto trading get into this “line of business” is due to the sheer amount of success stories of their peers achieving instant success (and huge wealth) through Bitcoin trading. Relying on luck is downright ignorant and irresponsible, even if it does happen to get you rich. On the other hand, there is no real way of playing it safe with any digital currency, including Bitcoin, as of yet.
There are no instructions on how to trade in Bitcoin yet and, despite all the common misconceptions, crypto trades are vulnerable to hacks.
At the same time, trading in Bitcoin is not only innovative and fun, but completely bank-interference-free (at least for the time being). Another great thing about trading in cryptocurrency is that you are not alone as a layman; your peers are also going at it by themselves, learning their ropes as they go, meaning that a vast array of skills and knowledge from expensive schools isn’t really necessary, or necessarily crucial.
Trading or investing in Bitcoin?
Where investing in Bitcoin is simpler, less time consuming and generally safer, the monetary gain here is much slower. This is called “HODL-ing” and it makes for an interesting and profitable pastime.
Make no mistake, trading Bitcoin is really a full-time job – as a crypto trader, you need to constantly keep up with the market, be available 24/7 and expect constant stress. Bitcoin trading is a tough job that can put vast amounts of money into your pocket, although at huge risks.
All in all, nobody can really say that Bitcoin is better than Forex, or vice-versa. Choosing between these two types of trading is based on your intentions. Both Forex and Bitcoin can be taken on as full-time jobs, in which case, choosing between the two platforms really boils down to your preference.
When it comes to making smaller investments, Forex definitely prevails, mostly owing to the fact that Bitcoin trading is still by-and-large very unstable and volatile.
On the other hand, Forex isn’t a market you can get into as a pastime, whereas Bitcoin trading can be done for potentially profitable fun – while you’re at work, at the gym, or watching TV. Approaching Forex trading from this perspective is ridiculous, as proper research and dedication are required in order to be successful here.
Finally, here’s a tip: if you are ready to tackle the world of trading and want to try out your skills (and, in part, luck), you can go for either of the two featured platforms. If you want to have fun while trading, without too much risk or time investment, give Bitcoin a go. If you are more serious, Forex is a much better and safer environment.