Over the years, Bitcoin has evolved and expanded into a platform for people who are looking for a possible hedge against economic uncertainties and the limitations of fiat currencies.
Unlike gold, there is no need to physically transport your asset. This makes it the ideal store of value.
How does Bitcoin trading compare to forex?
In spite of the differences between Bitcoin and forex trading, in both cases, the prices of digital currencies are based on the metrics dictated by demand and supply across the globe. It is quite straightforward: the price rises whenever demand increases, and vice versa.
Yet, it is important to point out that Bitcoin is not influenced by any form of supply uncertainty caused by international central banks. Its value is connected to the basics of cryptocurrency, while forex is linked to the economic actions and situations of a nation and its currency. Often, trading Bitcoin and Forex are almost similar. For instance, you can trade dollars for pounds via forex, and dollars for bitcoin via various peer-to-peer exchange sites.
Another point worth noting is the manner through which people trade currencies. Yet, probably the most obvious difference when comparing Bitcoin and forex is liquidity. The global currency trading market is valued above $6 trillion. In contrast, the Bitcoin market is worth billions. As a result, the Bitcoin market – which is relatively smaller – will likely experience a more volatile trading environment and the prices will swing significantly over different economic events.
There are several regulators that monitor the options that are related to currency trading. Some of these include the CFTC, NFA, and many more. The biggest and most liquid market across the globe is the forex market. It is a global currency market that is available anywhere and anytime. To further illustrate how dynamic forex is, Bitcoin has been accepted by several forex brokers for currency trading. Is it right to jump into this and start using your bitcoins in a forex market? You should know more about it first.
How can you trade Bitcoin on forex?
There are many forex brokers that can withdraw, deposit, and trade on any Bitcoin-based account. Yet, the functionality may be exposed to legal implications as a result of the fact that contracts for difference are prohibited in the US. Similarly, for people in the UK, the Financial Conduct Authority has warned agents about the platforms. However, there are many trading platforms in the UK with fair transaction fees.
Other forex negotiators are reportedly interested in incorporating Bitcoin trading in their platforms, but since they are Bitcoin-based, it is left to be seen if anything other than encouraging people to buy and sell Bitcoin through different exchange platforms is being done. It is better for investors to work with any good Bitcoin-based exchanges that trade in their preferred national currencies until forex expands more in their bitcoin offering.
If you wish to buy Bitcoin, it is necessary you create a bitcoin account and then, you trigger a transfer of an amount of money into the registered account every time you wish to purchase a bitcoin. There are several platforms on which you can buy at an agreed price. As a result, each transaction is locked before the bitcoins are delivered into the account.
Bottom line
Bitcoin has grown in popularity, usage, and influence globally over the past few years. With this increase in worldwide recognition as a good investment, the attention of many forex brokers, who are looking to expand what they offer, has been drawn. Many of them define Bitcoin as a traditional currency due to the fact that Bitcoin trading is not based on a country’s macroeconomics. Rather, it is a good platform that enables a broader reaction to changes in global economics.
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