In today’s competitive and technologically driven environment, a very large number of people are involved in investing their finances in different ventures to gain maximum profits out of them. Two of these most popular ventures in all parts of the world currently is Forex and cryptocurrency. These two primary modes of investment can include arbitrage, short-term trade approaches, and long-term investment ideas. However, it gets really important for all of us to understand the fact that there is a huge difference between these two markets and they have their own advantages and drawbacks. They are individually unique, have separate features, and their way of offering profits and transactions are also contradicting to each other.
So, if you were trying to understand what the basic differences and individual features of these two modes of financial investments, then this compilation is perfect for you.
Cryptocurrency is basically digital currency that functions as an entity online and has no physical presence. It has taken over the financial market tremendously and has been serving as a good investment alternative for a really long time now.
Let’s understand what the features of the cryptocurrency are and also what the related disadvantages are.
The main feature of cryptocurrencies is that they are volatile in nature. It means that its value keeps fluctuating from time to time, generally bringing in increases in its value.
The costing of carrying out these types of investments and then transactions are limited. This implies that there are no hidden broker fee and all.
Easy access to Bitcoins and other booming cryptocurrencies is one of the most beneficial features of the digital currency. As they are simply available online, all you need is capital, a computer or smartphone and a reliable online crypto broker.
It is very much possible that your wallet accounts in which you store your cryptocurrencies get hacked. This increases the risk factor.
Since the entire functioning of cryptocurrency is based on the blockchain, any disruptions or discrepancy in the network can hamper your investment process.
Since the majority of the countries have not declared it as a legal tender yet, it might get difficult to exchange it for goods and services.
Forex is basically the exchange of foreign currency among nations. Some of the most prominent characteristics of this field that serve as benefits and drawbacks to the users are listed below.
The market is quite deep and intense as multiple currencies are involved in it. This increases the opportunity of exploring and making profits.
Since the values of currencies do not fluctuate too heavily, this is a very stable form of investment.
Brokerage is not much as compared to other investment platforms.
Additional and heavy costs might be included in the name of the fee, ask spread and rollover.
Since the whole concept is driven by brokers, there is very less transparency in the system.
Here, all the traders and investors have to be on their own as they are provided with very less or even no guidance from professionals working in this field.
Therefore, despite using the same Internet medium, the size and features of Forex and cryptocurrencies vary a lot. You need to choose wisely between the two and go for something or maybe both when you are convinced with the concept and are sure of the requirements.