Get to know the difference between bitcoin forex trading.
What are bitcoin forex trading? Forex is an abbreviation of foreign exchange or foreign currency exchange known as foreign exchange (foreign exchange).
The purpose of Forex trading is to profit from the difference in currency values. Forex trading or foreign currency trading can occur because of the need for foreign currency from the community.
Some examples are the need for foreign currency for holidays abroad, buying goods abroad, business activities, etc.
While Bitcoin is one of the cryptocurrencies or virtual currencies that have been traded in various countries, investing in Bitcoin is in demand by many people because the price continues to increase.
Although Forex and Bitcoin look similar at first glance, both trades are carried out using the facilities provided by Forex brokers. But actually, they are different. Let’s see the difference between Forex and Bitcoin.
4 Differences between Forex and Bitcoin
Price Fluctuations when Trading Forex is Less Compared to Trading Bitcoin
In trading or Bitcoin, price movements are very significant. Even price fluctuations of hundreds of dollars in a day can occur several times.
Of course, this is very different from trading Forex on currencies in general.
This means that the profit potential in Bitcoin trading is much more significant than in Forex trading. However, you need to understand that trading Bitcoin risks are much greater than trading Forex.
Leverage in Bitcoin Trading is Lower Than Forex Trading
In Forex trading, very large leverage is common. The leverage of Forex trading starts from around 1:100 to 1:1000 and even more than that.
However, this is different from Bitcoin trading. For Bitcoin trading, Forex brokers will only provide leverage in the range of 1:2 to 1:20, where the leverage is much smaller than Forex trading leverage. Why is that?
That’s because the risk in Bitcoin trading is much greater. Therefore, Forex brokers or regulators avoid using excessive leverage because it can exacerbate the third situation of a loss.
Requires More Capital To Trade Bitcoin Than Forex Trading
The difference between Bitcoin and Forex trading this time is related to price.
As mentioned above that, the price fluctuations of Bitcoin are much larger while the available leverage is smaller. The conclusion that can be drawn is that you need more capital for Bitcoin trading compared to Forex trading.
The Bitcoin Market Is Much Smaller Than The Forex Market
You know that the average Forex trading volume reaches US $ 2 trillion. Therefore, the Forex market is often referred to as the most liquid market in the world. As for the Bitcoin market, it is still a small market.
Therefore, the price of Bitcoin tends to be volatile, where the price of Bitcoin is 5-7 times more volatile compared to Forex when a party buys or sells Bitcoin in large quantities.
Understanding the Difference between bitcoin forex trading
eightcap reviews, After knowing the differences between Forex and Bitcoin, you now understand Forex and Bitcoin better.
Both Forex and Bitcoin trading have their respective advantages and levels of risk. You can choose according to the level of risk you can bear.
Don’t be tempted by fantastic profits but don’t consider the risks. You also need to provide capital to trade Forex or Bitcoin. Arrange according to your financial management.