Does it Make Sense to Trade Cryptos Over Forex in Light of Recent Volatility?

By Phil Hammond
Published November 12, 2019 Updated November 13, 2019
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Does it Make Sense to Trade Cryptos Over Forex in Light of Recent Volatility?

By Phil Hammond
Published November 12, 2019 Updated November 13, 2019

Are we better off trading Bitcoin rather than forex? That’s the question on the lips of a growing number of retail traders around the world right now. Forex markets have always been considered as something of a safe haven for retail traders, simply because of the hundreds of forex pairs available and the liquidity up for grabs in each market.

Trillions of dollars of forex transactions take place on the financial markets daily. There are platforms that allow you to trade forex in the USA, Europe, and the Far East, with the ability to access clear, constantly updated charts on forex pairs in order to place swift, accurate trades on long and short opportunities. Political events such as Brexit and the ongoing trade war between the US and China have created the volatility that some traders crave.

However, back in 2017, there was the incredible rise of Bitcoin, which led the way and demonstrated the potential for digital currencies in terms of their flexibility and security. Investors in Bitcoin and other burgeoning cryptocurrencies in early 2017 will have made a fortune by the end of that year, with the price jumping from $900 in January to a staggering $19,000 in December. However, 2018 and 2019 have been rather less certain for cryptocurrency markets, often due to regulatory and legislative developments.

When you compare the potential price moves of cryptocurrency assets with forex pairs, the volatility in crypto trading compared with forex trading is astounding. It’s not been uncommon for cryptos like Bitcoin to experience 24-hour declines of as much as 8-10%. Meanwhile, when the pound plunged by 10% on the morning after the EU referendum in June 2016, it was viewed as the biggest fall in sterling in over 30 years.

Given the volatility and uncertainty surrounding the cryptocurrency industry at present, some might consider trading forex until there is some stability in cryptos for the following reasons:

  • Unrivaled liquidity
    The vast majority of cryptocurrencies only have a finite supply available to trade. By comparison, the liquidity of the forex is quite remarkable. Some $5 trillion of currency is bought and sold daily. Furthermore, the high liquidity of the forex markets makes it possible to execute trades quickly, allowing people to take advantage of even the most modest of price movements each day.
  • Markets offer more stability for newcomers
    We’ve already touched upon the volatility of cryptocurrencies and the scarcity of similar moves in the forex markets. This comparable stability gives newcomers to financial trading more certainty over the positions they take in the markets, although it’s still important to limit exposure using available risk management tools.
  • Speculate on global events
    The forex markets are heavily influenced by regional and global events. Take the current US-China trade war for instance, which is seeing both the dollar and yuan affecting each other and other currencies that are less conflicted. If you are someone who likes to keep their finger on the pulse of national and global politics, forex is an interesting place to start trading.

The truth is there’s still a place for trading cryptocurrencies and forex. Both disciplines require high levels of engagement and analysis, as well as sufficient risk management to take calculated opportunities in the markets.


The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Phil Hammond
1 Article
Pill Hammond is from London and is specialized in Forex and crypto

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