With more than $5 million traded on an average day, rising to a $6.6 trillion peak in 2019, it’s clear the forex market is the largest and most liquid market in the world. Operating 24/7 across four main trading sessions, forex involves the exchange of global currencies with cryptocurrencies like Bitcoin giving the market a fascinating new dimension.
In recent years, many forex brokers like 4xCube have started to accept cryptocurrencies for currency trading. But what are the benefits of using crypto for funding a trading account? And is it more convenient than sticking to traditional currency pairs like EUR/USD? Let’s delve in…
Bridging the gap between fiat and crypto
For simplicity, let’s focus on one of the most famous cryptocurrencies – Bitcoin. If you want to bridge the gap between fiat and crypto, it’s perfectly possible. You simply need to find a broker that’ll accept Bitcoin (or which ever cryptos you want to trade) and open an account. You can then transfer Bitcoins from your digital wallet to the forex broker’s digital wallet before entering a trade. As with all forex traders, you must look closely at the exchange rates and analyse the market carefully in order to try and gain a profit.
If the current Bitcoin (BTC) to U.S. Dollar (USD) exchange rate is 1 Bitcoin = $7,500, it means a deposit of 2 Bitcoins will be equivalent to $15,000 at that given time.
Benefits of trading FX with crypto
If you’re wondering whether to start trading crypto in the FX markets, it’s important to do your research and make a strict trading plan, particularly if you’re new to FX or have never paired cryptocurrencies with fiat currencies before. Play around with a demo account when possible and remember that forex trading is never without risks. Knowledge is key so make sure you’re firmly clued up and use the relevant tools provided by your platform.
Advantages of trading forex with cryptocurrencies like Bitcoin include:
Bitcoin is a decentralised currency meaning it’s not controlled by a middleman. This is advantageous in the world of FX for many reasons. Firstly, cryptocurrencies are not influenced by geopolitical factors. No bank is going to change market valuations overnight because banks don’t control the way cryptocurrencies work. What’s more, macroeconomic fluctuations caused by countries adjusting their interest rates or geo-specific inflation are not going to impact Bitcoin it the same way a fiat currency could be.
Global boundaries are eliminated
Bringing two decentralised networks together opens many new opportunities and global boundaries are eliminated. So, a forex trader in the US can make a Bitcoin trade with someone based in the United Kingdom without the red tape associated with many fiat-related trades. Experienced traders can also benefit from high leverage that’s appealing to those looking to potentially earn more from each trade. Although, don’t forget that high leverage means high risk levels.
When it comes to Bitcoin transactions, you do not have to share personal banking or credit card information for depositing or withdrawing funds as you would for fiat currencies. This is a major plus for maximum security when dealing with forex brokers.
The forex world is changing, with crypto now playing a key part. Speak to 4xCube.com today for a more detailed, AI-enhanced approach to navigating the forex markets.