Forex vs Crypto: Which Is A Better Investment For You?

Trading foreign currencies has long been a lucrative form of investment, but more recently a new form of currency trading has taken over using digital currencies or cryptocurrencies as they’re more commonly referred to. Both types of currency investment have their pros and cons – for those that have been thinking of getting into this type of investing, here are several questions to ask yourself that could help you determine which option is better suited to you.

How much do you have to invest?

First, you should consider your investment budget. Most forex brokers require you to spend a couple hundred dollars at least. When it comes to cryptocurrencies, there is no minimum investment, making it suitable for investors on all budgets.

How much of a risk are you willing to take?

It’s important to also weigh up the risk. This is where forex dealing generally has the advantage – world currencies are regulated and changes in value are never too dramatic so you’ve always got time to pull out if your chosen currency falls in value. When it comes to this form of trading currencies it’s also a lot easier to do your research and make educated predictions. This draws a lot of people to forex dealing who want to put careful research into their investment and not simply gamble.

Cryptocurrencies by contrast are very volatile. Values can rise and fall more dramatically and these fluctuations can often be harder to predict. That said, for some people this is part of the allure – more volatility can make it possible to make higher and quicker returns, so long as you’re willing to risk higher losses. The big issue is the lack of centralised regulation which can make it easier to get scammed out of money when trading crypto.

How much leverage do you want when buying/selling?

Some people like having the option to negotiate prices when buying and selling. Forex offers lots of opportunities to do this and well suited to those that want to barter. With cryptocurrencies, there are ways to buy with leverage, but it can be fairly complicated for those first getting involved. This makes forex the better option in this case.

Can you invest in something digital – or would you prefer something physical?

Many old-skool investors still have a hard time investing in digital assets. This is because they’re not tangible – you can’t reach out and touch them. When investing in foreign currency, you have the option to buy this as physical notes, whilst cryptocurrency can only ever be a bunch of 1s and 0s on a data storage device.

When it comes down to it, both types of currency have their drawbacks. Physical notes can be misplaced, damaged or stolen whilst cryptocurrency can be deleted, stolen or wiped. Ultimately, it all comes down to personal security and where your trust lies.