Bitcoin has gone through lots of changes and evolution since it first made its appearance in the market. It has evolved from a speculative Cryptocurrencies to a top digital asset. Many experts even believe that it has the potential to be used as a hedge against inflation (similar to Gold).
In a way, you can say that Bitcoin (BTC) can be categorized as a Foreign Exchange (FOREX) similar to Dollars.
Recently, the world is in turmoil. Traders and investors are amongst each other whether to call Bitcoin Asset or Currency. Although Bitcoin was introduced in the market as currency, people started using it as an investment asset.
The debate whether Bitcoin is currency or asset has accelerated exchanges on Japanese based Crypto exchange platform Mt. Gox. Seeing how things stand, Bitcoin has become a part of the FOREX. Unlike Dollars, other country’s fiat currency is not recognized globally. However, that is not true for Bitcoin.
Platforms like PushMoney have used this opportunity to use Bitcoin as FOREX and boost their business. The popularity of Bitcoin has grown significantly. This has created a market for people who are willing to invest in Cryptocurrencies and Bitcoin.
In a report, it was confirmed that several brokers had accepted the fact that they offer services that include Bitcoin as a part of FOREX.
Read on to come across the similarities and differences both trade and FOREX has to offer.
If we are talking about the differences, both Bitcoin trading and FOREX are certainly different in many ways. However, they do share similar features. Bitcoin is similar to the traditional asset as its price is directly proportional to demands. Hence, when the demand for Bitcoin increases in the market, it affects the price of Bitcoin.
With that being said, we know that Bitcoin is decentralized in nature, and the supply of the Bitcoin is not dependent on Central Banks. The new Bitcoin can be introduced in the market is by Bitcoin Mining.
Bitcoin’s value depends on its ecosystem. The members of the Bitcoin are responsible for the price fluctuations. At the same time, the value of the FOREX is controlled by the central authorities.
Out of all the differences, the most notable differences are the liquidation. If you see the market, the global fiat currency trading is well over $5 Trillion, which is far greater than the Bitcoin. Due to the smaller market, the Crypto market experiences high volatility. Even small trade can bring in sensitive curves.
There are many brokers who claim to offer services where you can deposit, withdraw, and trade with a Bitcoin-based account. However, you will find that the functionality of these brokers is different. In America, Contract For Differences (CFDs) is not allowed.
Other brokers accept the fact if they want, they can add this feature to their services. But this will not change the fact that they are offering the same thing as the Crypto exchange platform. This is the reason why brokers go with traditional methods to deal with Cryptocurrencies, rather than experimenting with new methods.
In the recent report made by Goldman Sachs, most of the Crypto trades are based on Chinese fiat currencies Yuan. This shows that, in the future, Dollar rivals will trade in Cryptocurrencies to boost their fiat currencies.
The popularity of Bitcoin has grabbed the attention of the FOREX brokers who are looking for an opportunity to increase their offering and services. These brokers value the Bitcoin equal to that of Dollars. Some even believe Bitcoin is a part of microeconomics.
Trading in Bitcoin is definitely similar to FOREX. However, while doing so, you are increasing trading fees. Using platforms like Coinbase will save more bucks than hiring a broker. Also, investors should take the Altcoins into consideration and choose the right Cryptocurrencies to increase their portfolios.
HussaiN is a full-time professional blogger from India. He is passionate about content writing, Tech enthusiast & computer technologies. Apart from content writing on the internet, he likes reading various tech magazines and several other blogs on the internet.