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To Do Crypto or Forex Trading? Here are Major Differences, Pros and Cons for Each

Crypto and forex or foreign exchange trading are similar in multiple ways: they both involve trading and exchanging of currencies.

Republished by Plato



Crypto and forex or foreign exchange trading are similar in multiple ways: they both involve trading and exchanging of currencies. If you were looking into which one to do, we got an entire list of things you can consider, the challenges, benefits and drawbacks for engaging in each. Forex is still a considerable choice for those willing to invest in regulated currencies, hedge against international currency and interest rate risk, to speculate on geopolitical events, and to diversify portfolios, and other styles. Managers, commercial banks, central banks, money managers and hedge funds are the main participants in this market. In contrast, there are a higher percentage of individuals who are doing cryptocurrency trading. Plus while forex — like stock — trading would be more viable for those looking for more stable and regulated assets, crypto is preferable for those who love to trade market volatility and where there is very few to no barriers of entry and low capital and investment requirements.

What differences would you encounter between crypto and Forex  trading?

The major difference between the two is that while crypto trading is relatively new, forex is well-established all with its brokers, middlemen and it has much better institutional adoption. Forex has so much liquidity, with trillions of USD traded in a day, when compared to crypto especially with the lesser popular coins, and there is also the issue of security of investments. Besides, forex is regulated industry and a mature market with brokers located and distributed in nearly every country. All these present major advantages for anyone wanting to venture into Forex trading. Probably the main drawback of Forex when compared to cryptocurrency trading is the cost with trading, with it getting more expensive to trade even before the trader can start getting profits. Forex requires substantial capital before you can get get started. Besides, Forex has low price variability or volatility for individual currencies, making it lesser attractive than crypto for those who want to trade violatility. Again when compared to cryptocurrencies, Forex’s large establishment world-over is its drawback in a way because individual traders are competing against well-established institutional Forex traders and banks. Although cryptocurrency market also has well invested institutional traders and high-frequency traders, the extent of competition is somehow limited compared to forex trading. In both cases though, one would require a high level of engagement, equity planning, proper risk management, perseverance and a strong desire to continuously learn. In both cases, educated investors have high chances of winning.

Here are some reasons you might want to engage in Forex trading compared to crypto trading

1. High liquidity

Trillions of money are now already invested in Forex trading and each of the pairs sold and bought on the forex market represents high liquidity, meaning the easy with which each single cryptocurrency can be traded for another, instantly. Whether you are trading local currencies in world’s most remote places or internationally-established currencies like Euro and USD, it is easy to find ready market and the high daily turnover means orders get filled instantly. Another advantage of high liquidity is that it reduces the role large traders play in the market. Large trades will not overly change the asking price of a given trade. In cryptocurrencies, lack of liquidity is common for many of the cryptocurrencies from the 5000+ cryptotokens and digital assets available. Large traders always lead price manipulations.

2. Security concerns: Forex is fully regulated

It’s a major problem with investing in any valuable asset, that there is risk of loss from manager or trader malpractice or errors caused by exchanges and platforms where money is kept. There are many cryptocurrency exchanges that have been hacked so far leading to loss of millions of dollars although again more has been lost in breaches related to Forex. While breaches on crypto stuff can be tracked, and a majority of platforms will refund money anyway, there would be lots of trouble because of the loose nature of regulating cryptocurrencies as a separate subject from assets and commodity law/regulation. In some cases, it is not certain that the cryptocurrency platform would even refund the money in case of a hack, internal errors or malpractice or other circumstance that lead to a loss. Apart from hacking practice and errors, lots of malpractices and scams in cryptocurrency may lead to loss of individual funds where the investor or trader does not do due diligence. Accompanied with the nature of blockchain technology that offer no method of recourse or reversal of transactions. In comparison, Forex transactions are governed by regulations and some level of protection as a requirement. Brokerage accounts also are insured by governments in the event of a theft or fraud. For these reasons, Forex transactions would appear to be secure and safer for those traders prefering a regulated investing environment. The fact that it is regulated explains the so-seemingly better trading conditions for forex because there are clearer guidelines on how to proceed with all nature of transactions.

3. What influences prices? more stability for Forex

The exchange rate of currency pairs play to economic development, political uncertainty, fiscal policy, central banks’ interest rate decisions, or even weather factors. Trading systems that deal with forex trading also provide good forex signals you can rely on to trade profitably.

4. Market capitalization is huge in Forex markets

Market capitalization being huge means there is greater liquidity, depth and stability, and this applies either in BTC or Forex transactions. Forex is far the largest marketplace in the world by market capitalization and the trading volume is in the tune of $5.1 trillion per day compared to $84 billion for equities worldwide. The high volume in Forex trading is attributed to the high public interest facing the seven major global currencies. While volatility may be more preferable for those trading volatility, relative pricing stability ensures that people who are trading something else aren’t losing too much of their investments. As such, they are able to remain in the market for longer. The United States Dollar is largest traded in volumes at the tune of 89%, Euro 31%, Japanese yen 22%, British pound 10%, Australian dollar 7%, Canadian dollar 5%, and Swiss franc 5%.

5. Extensive leverage

Like there is in cryptocurrencies, there is considerable leverage in stock ranging from 50:1 up to 100:1 margins. Same applies in cryptocurrency trading.

Here are some reasons you might want to engage in trading cryptocurrencies

1. High differences in exchange rates or price differences between crypto

Because there is high variability in cryptocurrency prices with those prices changing quickly every other minute and second of the day, crypto trading is now a major attraction for traders who are trading volatility. Huge volatility for traders who trade volatility means it is possible to buy low in the morning and sell high a few hours later. For instance, if you were trading stock markets, you could make a 5-15% ROI while Bitcoin would yield 12 months ago would yield approximately a 144% return. High volatility in crypto markets explains the gaps and slippages which are rare in forex trading except for those trading exotic currency pairs at low-quality brokers. The high volatility may present a problem for some traders, it’s true. However, as prices get influenced by day-to-day and minute-by-minute happenings such as news and events that are beyond individual traders’ control. In fact, part of the problem in this regard is manipulation because large institutions and companies can manipulate easily by way of propaganda, ad payments or through news outlets since they have huge following and given the low market cap for majority of crypto. With cryptocurrencies, however, we have quicker and more dramatic changes in prices which is influenced by things like news and events. Although volatility is high in cryptocurrencies, large coins do well and the volatility was still decreasing. In deed, over the years, Bitcoin, for instance, has seen less dramatic volatility shifts with sometimes being more synonymous with traditional currencies. This is even as more exchange continue to witness deeper liquidity, more people understand Bitcoin pretty well, and after increase in the overall confidence in long term viability of network without panic-induced buying and selling.

2. Lower barriers to entry

Cryptocurrencies are not just easy to buy by individual traders but also do not require registering with brokers as would Forex trading. Plus many online platforms have less to no requirement for identification because crypto is strong case for remaining anonymous on the internet. The reason BTC and crypto investments and trading have low cost and barrier of entry is because there are no intermediaries in the classic sense as in the case in foreign exchange markets. In cryptocurrencies, it is easy to enter the market with lesser than $50. You can then take advantage of higher volatility in crypto than there is in stock or Forex markets. This provides more opportunity to earn more profits. In stock and forex trading, companies that offer trading services require a great deal of information and sometimes even a declaration of “professional investor” status. This adds more costs and delay. Beginners in both cases would need to spend some time to understand the art. However, it is easier for a beginner to learn cryptocurrency trading from scratch before they can get started and earn some profits. Paper trading is also possible in cryptocurrency trading as much as in Forex trading for those trying to learn to trade. In comparison, there is a higher learning curve in stock and forex trading although forex signals can help reduce that learning curve than when you do analyses yourself. With stock and Forex trading, there also will be lots of paperwork and associated costs before you can start trading. Additionally, making the first profit is also going to be very difficult in crypto trading.

3. Lots of currencies and pairs to trade in

There are now more than 5000 cryptocurrencies and altcoins and digital assets. This presents one advantage for crypto traders; they are are able to choose from a variety of tokens and crypto for which to trade against each other. So if it’s a dark day for Bitcoin, one might check if there is relieve in Ethereum or some other low cap coin. Diversification is as real in crypto trading as is in stock or in Forex markets. It depends on one’s ability to build a workable and beneficial crypto portfolio.

4. High leverages

Like is the case with Forex trading, one is able to trade on leverage means they do not need an instantly large amount of crypto to be able to eye huge profits on a trade or several trades. In crypto as much as Forex trading, traders are able to invest a little amount of capital and harvest more profits than they should have with disposable capital because what leverage does is to loan out money to the trader to buy more or enter more (or larger) positions. Forex also does have leverage and leverage also means that traders can lose big if markets are moving against their bet.

5. Available 24/7

Without centralized governance of the market, and with most of transactions taking place directly between individuals, crypto is traded 24/7 without market closures. Even crypto exchanges do not have closing times. This is compared to stock or other markets than do not run on weekends or holidays. Forex market, for instance, is available 24/5

6. Availability of tools for trading and investing

In both cryptocurrencies and Forex trading, there are so many external tools that can aid traders in the making of more and more profits as they advance their art. Probably, there are more tools, including advanced tools, for those who want to start trading forex than there are for those willing to start trading crypto. However, it is harder for individuals to recognize, analyze, and capitalize on trends in the greater stock and Forex market. This is not so with cryptocurrencies where prices increase and decrease in a much more tied version to one another and related to each other. Thus, in cryptocurrencies, experienced traders can effectively predict the movements in the market but with stocks and Forex, it may be difficult to predict the larger issues that move markets. What it means is that although it is possible to do analyses to project crypto prices, it is harder to accomplish that it is in cryptocurrencies.



How NFTs, DeFi and Web 3.0 are intertwined

Republished by Plato



While blockchain itself provides the technology constructs to facilitate exchange, ownership and trust in the network, it is in the digitization of value elements where asset tokenization is essential. Tokenization is the process of converting the assets and rights to a property into a digital representation, or token, on a blockchain network. 

Distinguishing between cryptocurrency and tokenized assets is important in understanding exchange vehicles, valuation models and fungibility across the various value networks that are emerging and posing interoperability challenges. These are not just technical challenges, but also business challenges around equitable swaps.

Asset tokenization can lead to the creation of a business model that fuels fractional ownership, the ability to own an instance of a large asset. While discussing asset tokenization in a previous article, I also mentioned the value of an instance economy in democratizing finance, commerce and global access, as well as in creating a broader global marketplace at a scale never before seen.

With digital assets and their fungibility in a blockchain ecosystem, there are various drivers of valuation. These include: 1) tokens based on crypto economic models that are driven by supply and demand, and the utility of the network; 2) nonfungible tokens, or NFTs, which have an intrinsic value such as identification, diplomas and healthcare records — essentially, tokens that are simple proof validations of the existence, authenticity and ownership of digital assets; and 3) fungible tokens that are valued on various bases, such as the sum total of economic activity in the network (cryptocurrency), its utility (smart contracts and transaction network processing), assigned values (stable coins and security tokens), and so on.

In this article, I address the complex issue of the hyperbolic and rapid rise of NFTs, after a similarly meteoric rise of decentralized finance, or DeFi, creating amazing innovations — with immense promise of democratization, new business models and global marketplaces with global access — all fueled by the basic premise of decentralization and fundamental constructs of tokenization and wallets. While NFTs may be characterized as one-of-a-kind cryptographic tokens with some intrinsic value to a holder or to a market (art, collectibles), the NFT movement is indicative of a larger token revolution that will not only fuel massive innovation and growth in Web 3.0 protocols but also test the resolve of the DeFi movement, along with its ability to intersect and provide platforms and an exchange vehicle for all token types.

Growth in Web 3.0 protocols

The first two generations of web protocols were largely about disseminating information and connecting people. They fueled a massive growth in information and collaboration, and did wonders for connecting the world. However, those web protocols were never designed to move things of value. Also, as the Web 2.0 era reached its fullest potential, vulnerabilities such as “fake news” and the “batched relay” of the movement of assets via a series of intermediaries emerged. Threats to the commerce and financial infrastructure of the system risk destabilizing it.

Web 3.0 promises to safeguard all things we value: information, truth and digital assets — both fungible and nonfungible. Whereas Web 2.0 was driven by the advent of social, mobile and the cloud, Web 3.0 is largely built on three new layers of technological innovation: edge computing, decentralized data networks and artificial intelligence.

The growth of NFTs has not only empowered the ability for artists, skilled professionals and entrepreneurs to encapsulate innovation in a tokenized form but has also fueled the democratization of the platform as one of the promises of blockchain technology. The underlying infrastructure includes decentralized storage technologies, efficient consensus protocols, off-chain computing, and oracle networks to provide connectivity and validation to existing systems.

Collectively, the Web 3.0 set of technologies envisions a connected, trustless, accountable network for efficiently delivering value, thus crafting an infrastructure for things of worth. NFTs represent both transferable entities and nontransferable tokens that we value. The latter include things such as our identification, healthcare records and passports, things that represent us and allow us to participate in the digital economy with our own unique, digital identities.

As we dare to envision a shift toward a world with decentralized control, governance based on distributed technology that challenges every business model, and governance structure built upon centralized business frameworks, we do have to ponder some things. Not only the shift itself, but the motivation, incentive and monetization elements that fuel and power the economic infrastructure to move things that have value — thereby keeping up with our changing perception and subsequent realization of that value.

Intersecting with finance — DeFi

DeFi is the movement in the blockchain applications space that leverages decentralized network technology to disrupt and force a transformation of old financial products into trustless, transparent protocols, facilitating digital value creation and dissemination with few to no intermediaries. It is widely understood and accepted that — due to new synergies and co-creation via new digital interactions and value-exchange mechanisms — blockchain technology lays the foundation for a trusted digital transactional network that, as a disintermediated platform, fuels the growth of marketplaces and secondary markets.

While DeFi aims to deliver the promise of finance democratization, NFTs test the resolve of DeFi by delivering a competitive yet inclusive asset class, plus avenues to provide a medium of exchange, fungibility by other fungible asset classes, and liquidity to a traditionally illiquid market.

Asset classes resulting from DeFi protocols and NFTs avail themselves of the advantages of fractional ownership of the assets, blurring the lines between asset classes and using constructs like digital wallets as a receptacle for them. This is all supported by underlying layers of Web 3.0 that provide security and availability via decentralization, as well as trust and immutability via consensus, extending these principles to basic computer infrastructure like storage and interconnect.

Commercialization of Web 3.0 protocols, which manifest as fungible utility tokens, further blurs the lines with diverse financial innovation products introduced by DeFi (such as base assets and derivatives), products that are also tokenized. So, while decentralization is the underlying theme — and the wallet and the token are fundamental constructs — these blurring lines are quite profound.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Nitin Gaur is the founder and director of IBM Digital Asset Labs, where he devises industry standards and use cases and works toward making blockchain for the enterprise a reality. He previously served as chief technology officer of IBM World Wire and of IBM Mobile Payments and Enterprise Mobile Solutions, and he founded IBM Blockchain Labs where he led the effort in establishing the blockchain practice for the enterprise. Nitin is also an IBM Distinguished Engineer and an IBM Master Inventor with a rich patent portfolio. Additionally, he serves as research and portfolio manager for Portal Asset Management, a multi-manager fund specializing in digital assets and DeFi investment strategies.

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Has the rally ended for altcoins like LINK, ADA, and NPXS?

Republished by Plato



With most altcoins rallying at the current point in the market cycle where Bitcoin is making a comeback, there are a few altcoins that may have ended their price rally. Among these, LINK ranks in the top 10 cryptocurrencies based on market capitalization.

LINK’s oracles may have filled the void left from the removal of XRP from Grayscale’s fund. However, that does not seem to have had an impact that would last long enough to boost the price on spot exchanges. The asset is currently trading at the $32 level, down from its ATH. Though there is anticipation that the price will rally to its ATH, the dropping trade volume across exchanges signals otherwise.

After being added to Grayscale’s fund, LINK’s price went up steadily, however, a boost from institutional demand may not be enough to boost the asset’s price. 93% HODLers are profitable before the asset takes a dip in the current cycle

The altcoin rally may have ended for LINK, ADA and NPXS

Grayscale LINK Holdings || Source: Bybt

LINK’s institutional demand has had only a partial impact on price, and the trend reversal depends on the HODLers profitability at the current price level and the rally of altcoins led by ETH. Historically, Bitcoin’s rally has had a negative impact on LINK’s price and that remains to be seen as Bitcoin traders above $60000 once again this weekend.

Another top altcoin, Cardano has offered HODLers an ROI of over 440% in 2020. This altcoin has been considered to be the one to HODL in the long term based on on-chain analysis and trader sentiments. In the current cycle, 65% HODLers are profitable at the price level of $1.23. This is one of the top altcoins in which the concentration by large holders is low, below 50%, currently at 24%.

Additionally, at this point in the rally, there is a significant drop in ADA’s trade volume across exchanges. This drop in liquidity may lead to a drop in price over the following week. Though large transactions in the past week have been above $30 Billion, the volume is dropping consistently.

The altcoin rally may have ended for LINK, ADA and NPXS

ADA price chart || Source: Messari

Unlike ADA and LINK, in the case of NPXS, the price is back to the same level as a month ago. The 24-hour trade volume has taken a plunge with a near 100% drop in 24 hours, and this is a unique position in NPXS’s price cycle. Moreover, the on-chain sentiment is bearish and this may be the ideal time to buy altcoins like these that are consolidating. The confidence is consistently high in top markets on spot exchanges, and the dropping trade volume is a sign of consolidation.

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Kraken Daily Market Report for April 09 2021

Republished by Plato




  • Total spot trading volume at $1.02 billion, down from the 30-day average of $1.34 billion.
  • Total futures notional at $417.0 million.
  • The top five traded coins were, respectively, Bitcoin, Tether, Ethereum, Ripple, and Polkadot.
  • Strong returns from Waves (+23%), Basic Attention Token (+17%), Keep (+13%), and Filecoin (+12%).

April 09, 2021 
 $1.02B traded across all markets today

#####################. Trading Volume by Asset. ##########################################

Trading Volume by Asset

The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.

Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (April 10 2021)

Figure 2: Mid-size trading assets: (measured in USD) (April 10 2021)

Figure 3: Smallest trading assets: (measured in USD) (April 10 2021)

#####################. Spread %. ##########################################

Spread %

Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.

Figure 4: Average spread % by pair (April 10 2021)


#########. Returns and Volume ############################################

Returns and Volume

Figure 5: Returns of the four highest volume pairs (April 10 2021)

Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (April 10 2021)

###########. Daily Returns. #################################################

Daily Returns %

Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (April 10 2021)

###########. Disclaimer #################################################

The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.

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