What’s the difference?
Essentially, whether you’re trading forex, commodities, stocks or cryptocurrencies it is all the same. The point of the game is to buy at a low price and sell high generating a profit. Therefore if you are familiar with trading traditional currencies it would not be difficult to move into Bitcoin trading, cryptocurrencies and other assets. You can essentially still apply some of the same financial tools and indicators to trading cryptocurrencies very successfully. You also need to keep an eye on the news. As with any asset financial news or announcements relevant to that asset will make it move significantly.
The differences come in as cryptocurrencies are still considered to be in their infancy. Forex, stocks and other assets have developed over a long time and therefore can be considered rather predictable. As with cryptocurrencies there’s no central authority that regulates the prices they can be very volatile. That on one hand can be seen as risky on the other hand this is how you make money with trading – volatility. In that sense it is easier to make profits trading Bitcoin than for example on EUR/USD as there’s a bigger movement in this great cryptocurrency hence you need a smaller investment to start with. Of course if it goes the other way for you you will also see a faster decline in your profits than you would with traditional currencies.
Why should you prefer Bitcoin trading to traditional currencies?
As I already pointed out above the principals are essentially the same. When looking at Bitcoin trading vs traditional currencies trading there’s no right or wrong choice. There’s just a difference in how the price moves and reacts. I suggest every trader should and normally will find their favourite strategies and assets. Now as trading traditional currencies is very popular and seen as something that can sufficiently grow your savings or income it also has a huge volume behind it. Most of that is generated by the big banks and financial institutions. You can still make great profits trading traditional currencies as a sole trader but the cost of entry is normally a lot higher.
There is a lot of scepticism in Bitcoin trading as everything new creates a certain amount of fear and resistance. My view is that innovation is nothing to be scared of, it’s just the natural course of things. As crypto’s are still developing it’s easier to get into trading it as even with a small investment you can almost double your starting deposit in a relatively small amount of time. I am sure that the volume and interest in Bitcoin trading will grow rapidly in the upcoming years – this is why I suggest all traders to get acquainted with it.
The price of Bitcoin
Now even though I speak of a lot of volatility when mentioning Bitcoin trading vs traditional currencies it has also stabilised a lot in the last year. You can easily determine established support and resistance levels. Also as more and more businesses start accepting and investing in Bitcoin we will start to see even more stability. I do still believe that Bitcoin will remain more volatile than traditional currencies however in my eyes that is not a bad thing at all.
Bitcoin trading vs traditional currencies
So what’s it going to be ? Bitcoin trading vs traditional trading ? There’s no winner here, there’s just personal preferences. As I am deeply fond of the concept of cryptocurrencies and also the fascinating technology behind it, I choose to invest in them as this in a sense will help develop them even more. This technology will innovate and improve so many areas and I am excited to see what the future brings.
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