Cryptocurrencies and forex are two popular financial assets among day traders. Forex refers to currency pairs like EUR/USD and GBP/USD while cryptocurrencies are digital coins like bitcoin and ether.

A contract for difference (CFD) is a financial derivative that enables people to trade assets without holding the real asset. They simply give them exposure to an asset’s price. Therefore, a trader who buys, or sells, a BTC CFD does not own a real bitcoin. Instead, they will benefit when their price moves.

Forex and cryptocurrency market size

The forex market is one of the biggest industries in the world. It is estimated that the industry has a daily volume of over $6.6 trillion. There are three main types of forex pairs in forex trading: majors, minors, and exotics. Most brokers offer less than 130 currency pairs.

On the other hand, the crypto industry is relatively small because it is slightly over a decade old. At their peak, all cryptocurrencies had a total market cap of over $3 trillion.

However, there are more cryptocurrencies than forex pairs. According to CoinMarketCap, there are over 20,000 cryptocurrencies in the world. Nonetheless, most forex and CFD brokers provide a handful of major digital coins like BTC, LTC, and BCH. Also, cryptocurrency volume is mostly dominated by major coins like BTC and ETH.

Time of trading in forex trading vs crypto

A major benefit of fx trading is the number of hours you can trade them during the day. Unlike stocks and commodity CFDs, forex trading is done on a 24/5 basis. The market opens on Monday and closes on Friday. This means that anyone – including those working 9-5 jobs can create time to trade.

Meanwhile, in terms of timing, with cryptocurrency CFDs, the market is open on a 24/7 basis. Therefore, you can plan your time so that you can trade during weekends. However, not all forex and CFD brokers offer cryptocurrency CFDs during the weekends.

Market manipulation in cryptocurrency and fx trading

Market manipulation is a major concern when trading all financial assets like stocks and digital currencies. In 2015, leading banks like Barclays and JP Morgan were forced to pay $5.7 billion for
manipulating the forex market.

While manipulations like pump and dump schemes still happen in forex trading, they are more common in cryptocurrency. This happens because cryptocurrencies are loosely regulated and somewhat easier to manipulate than forex. For example, it is popular for cryptocurrency developers to hype their tokens in a bid to boost their prices.

Crypto and forex cost of trading

Most forex and CFD brokers don’t charge a commission for their services. Instead, they make money using a spread between the bid and ask prices of the asset. Several factors determine this spread. For example, highly volatile and illiquid financial assets have wider spreads than liquid ones. For example, in forex trading, popular pairs like EUR/USD have thinner margins than crosses like EUR/TRY.

In terms of the cost of trading, forex pairs generally have lower costs than digital currencies. Besides, cryptocurrencies are usually more volatile than forex pairs.

Catalysts for price movements

There are many catalysts for forex and cryptocurrency movements. Some of these catalysts are similar while others are different. Forex pairs are mostly moved by macro factors like interest rates and fiscal policy. On the other hand, cryptocurrencies have some internal factors that drive their price action. For example, the bitcoin halving and Ethereum merge are two events that drive crypto prices.

Summary

Cryptocurrency and forex trading are two popular financial assets in the market. In this article, we have looked at the key differences between trading the two. Still, they also have some similarities. For example, cryptocurrency and forex traders rely on fundamental, technical, and price action analysis to make decisions. Also, risk management is an integral part when trading the two.