While there are obvious differences in the way cryptocurrency is traded from the way in which stocks and forex trading takes place, there are several more subtle differences that we need to explore.

Regulation

Digital currencies, cryptocurrency, lack centralized control which differs from standard fiat currencies which are reliant on banks and governments to regulate them. Standard currency trading through forex has been around for many years and regulation from many countries results in few fraudulent activities in general. There is currently no regulation around cryptocurrency trading. There is no central authority so there is a reliance on the blockchain technology to protect from tampering.

Dependencies

Both cryptocurrency trading and forex trading are dependent upon supply and demand. However, while fiat currencies have a distinct and measurable value, cryptocurrency can only be considered as speculative as there is no physical asset to tie it to, it is purely digital. For this reason, crypto does not qualify as being a legal tender and has no government backing or supply from a bank.

Traders

Whereas forex traders can be anyone from individuals to multinational corporations, crypto traders tend to be mainly smaller investors with less presence of companies or governments. There are dedicated brokers providing the opportunity to deposit funds by crypto. All traders, whether dealing in crypto, stocks or forex, need to be well-informed in order to have any success. Trading is not an easy task, whichever you are dealing in.

Trading Hours

When trading cryptocurrency, investors can access exchanges at any time of the day, during any day or week of the year as they quite literally never close.  Forex traders can access exchanges during weekdays only as the markets close during the weekend so if you are too busy during the week or are simply a weekend trader then crypto would definitely be one to consider.

The Markets

Cryptocurrency is a completely virtual currency which is decentralized and assets such as bitcoin are traded. Forex exchanges one currency for another and profits are made from the difference between the two.

The crypto market is less regulated and protected than other markets such as forex. Cryptocurrencies, however, are built using a technology called ‘blockchain’ where transactions are recorded in ‘blocks’ using a technical process which is more difficult, but not impossible, to hack.

The stock market is far more stable and consists of shares which are issued by several public companies who sell stakes to their investors. They are government regulated in the same way as the forex markets are.

Volatility

The crypto market is far more volatile than stocks and forex and is subject to greater market swings as a result. The stock market, of the three, is the most stable and forex sits comfortably somewhere between the other two. Crypto is a good choice for someone who is keen to trade where prices are moving constantly. There is more opportunity for a quick profit but it is naturally more risky too.