Foreign exchange is among the largest markets out there. With a daily volume of almost 6 trillion dollars, moving money worldwide definitely promises great returns on your investments. With the current rise of cryptocurrency, one might ask: can you trade cryptocurrency on Forex? Let’s find out and explore what else we can do with cryptocurrency trading.
Foreign exchange or Forex (or FX, for others) is the exchange of one currency to another currency. The forex market is one of the biggest stock markets today, with almost 6 trillion dollars traded daily. Forex is a very important market in terms of the global economy. Transactions made around the world require an exchange of currencies to be processed. Thus, the forex market is also one of the most liquid asset markets in the world. It’s no wonder that people in the cryto world as – can you trade cryptocurrency on Forex?
Let’s look at an example. If you live in the United States and plan to buy an Italian made shoe, you have to pay for the Italian shoemaker in euros. To purchase the product, you have to exchange your US Dollars for its equivalent in Euros. If you are buying it in a local store, the importer also did the same thing. Another easy-to-understand example is traveling. When people travel around the world, they need to convert their money into their destination’s local currency to roam around and pay for things. The equivalent value of the money from your home country to the local currency depends on the forex rate.
The forex market is unique compared to other investment markets, like stocks and others, because transactions happen worldwide between the network of traders’ computers. The market is open 24 hours a day for 5 ½ days a week. Currencies are being traded every time in every financial center in New York, London, Japan, and other cities that are scattered across different time zones. That’s why prices can change any time as long as the market is open. This also shows the volatility of the forex market.
Many factors affect a currency’s strength, like interest rates, tourism, economic stability, and geopolitical events. These factors affect the performance of a currency. Since Forex trades currency in pairs, a weakening currency can strengthen the other currencies they are exchanged with.
To answer the question: “can you trade cryptocurrency on forex?” let’s see how these things connect with cryptocurrency.
Like the foreign exchange market, the cryptocurrency also deals with trading currencies. In cryptocurrency trading, you can buy, sell, send, or receive in the cryptocurrency exchange platforms. Like with Forex, you can also trade one form of cryptocurrency to another.
Trading cryptocurrencies is one of the things that continues to fuel its blockchain technology. Each transaction will be verified and then added to the blockchain, and in turn, this will generate new cryptocurrency, and the cycle continues.
This market is relatively young since bitcoin was only released publicly in 2009. Given this information, how does it connect with the largest stock market that is the Foreign Exchange, and can you trade cryptocurrency on Forex? Learn more about cryptocurrency trading here!
Cryptocurrency Trading on Foreign Exchange Platforms
In recent years, cryptocurrency has expanded, with lots of other altcoins created every day. The market that accepts cryptocurrencies has grown, and the rapid surge of cryptocurrencies’ price happened too. These events pushed cryptocurrency to mainstream popularity.
Nowadays, cryptocurrencies are now carried by major foreign exchange platforms. Top platforms also invest in crypto holdings showing how valuable cryptocurrency investment can be.
People who want to cash out their digital coins also created the connection between foreign exchange and crypto trading. Cryptocurrency exchange platforms and foreign exchange platforms started carrying out transactions of selling your crypto assets and withdrawing them to your banks. The people who want in on crypto also adds to this when they buy crypto assets using their cash.
These examples show how cryptocurrency trading becomes tied up with foreign exchange. By using the same concept of trading currencies, trading cryptocurrency from one kind to another feels the same as trading a dollar to euros. Trading cryptocurrencies for real money also feels the same way.
Crypto trading has been very profitable lately. One of the effects of this recent surge is that many other exchange platforms are starting to carry cryptocurrencies under them. Even foreign exchange platforms are taking them now. Some of these forex companies even invested in cryptocurrencies. So, if you ask now, can you trade cryptocurrency on Forex? The answer would be yes. Cryptocurrency trading still has a bright future ahead of it.