Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Cryptocurrencies Versus Forex: Which Is The Better Investment?

By ValueWalk (Jacob Wolinsky)Market OverviewApr 01, 2021 02:00AM ET
Cryptocurrencies Versus Forex: Which Is The Better Investment?
By ValueWalk (Jacob Wolinsky)   |  Apr 01, 2021 02:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Cryptocurrencies and foreign exchange (forex) have some things in common and can even be traded against each other, but which is the better investment? Both can play a role in a well-diversified portfolio, but if you have to choose just one, it depends on your goals and other factors.

Similarities and differences

Cryptocurrencies and forex are both forms of currency, which means they bear quite a few similarities. However, investors who don't like to speculate on new assets might want to stay away from crypto and opt for forex instead. There is still a certain amount of speculation that goes along with trading forex, though, so that is something else they have in common.

The crypto market and the forex market are both open around the clock, but the forex market is only open Monday through Friday, while the cryptocurrency market never closes. If you are limited in the time you have available for trading, it could make a difference on which asset you choose to trade.

On the other hand, cryptocurrencies are unregulated, while forex is regulated by the central bank of the country whose currency you are trading.

Choosing between forex and crypto

Cryptocurrencies and forex both present opportunities for investment gains, so if the above similarities or differences didn't sway you in one direction or the other, there are other factors to consider. For example, you should think about how long you want to hold the asset and wait for its value to appreciate.

The forex market tends to be very fast-moving, with many positions remaining open for less than a day. Forex traders have to be on their toes, ready to make a trade the instant they see an opening. On the other hand, cryptocurrency traders may be able to buy and hold for an extended period.

Crypto traders may choose to sell their digital currency quickly because prices are very volatile. The bitcoin price, in particular, has been volatile, which means it may be possible to buy some at a lower price and then sell it in less than a week. However, there is also value in holding bitcoin or other cryptocurrencies for the long-term, unlike forex.

Thus, if your goals are extremely short-term, it might make more sense to trade forex or at least to keep that in mind when trading cryptocurrencies.

Trading cryptocurrency against forex

In some ways, cryptocurrencies and forex go hand-in-hand, so it might make sense to trade both. Most U.S. forex brokers allow you to trade them against each other, but there are some things you should keep in mind if you decide to do that.

For example, both forex and crypto prices can be extremely volatile, so when you trade them against each other, you are constantly battling price changes in both of them. Additionally, using cryptocurrencies to trade against foreign currencies can be complex if brokers require digital currencies to be transferred into U.S. dollars before they can be used to trade forex.

Because of the volatility of forex and cryptocurrency, you must be even more vigilant when trading than with forex alone. You may find that at certain times, it's better to trade using the dollar or your native country's currency, while other times, it may be a good idea to use cryptocurrency to trade forex.

There are plenty of opportunities in trading forex and cryptocurrencies, so the wise trader will watch their assets grow if they know what they are doing. Study the markets before you make any investment decisions and look for the best forex broker to handle your trades. Decide what your goals are and what your trading style is like, and then trade accordingly.

Cryptocurrencies Versus Forex: Which Is The Better Investment?

Related Articles

Cryptocurrencies Versus Forex: Which Is The Better Investment?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email