Forex vs Cryptocurrency – Which is more profitable?

Forex and cryptocurrency are two concepts that deal with currency and currency trading. While the former appears to be more physical, the later operates within the digital terrain (virtual currency existing as data). However, both are renowned contenders in the world’s finance market today.

But in a world where investors continue to invest in currency trade markets in pursuit of more opportunities, one where beginners are constantly on the look-out for financial gold mines; this controversial question of profitability is not farfetched. While it might be difficult to determine the most profitable investment, a brief look into the highlights and challenges associated with each market will enable you make more informed decisions.

Let’s have a brief look at Forex and Cryptocurrency to know what they both entail.

What is Forex?

Foreign exchange (Forex) otherwise known as currency trading is a decentralized global market for the trade of various currencies. Here, traders buy, sell and exchange different currencies in a bid to make profit off changes in value. Through financial institutions acting as anchors, currency trade between buyers and sellers are made possible. The market is said to aid international trade and investments by making currency conversions readily available globally. It is by far the biggest and boasts the highest liquidity in the world, owing to an approximately $4 trillion USD traded transactions daily.

What is cryptocurrency?

Cryptocurrency is also known as digital currency or virtual currency. It is the type of currency that operates on a secured digital interface (cryptography). In cryptocurrency trading, what traders exchange are the virtual currencies such as bitcoin, altcoin, ethereum etc, just like in Forex. This currency is widely accepted in the world today in place of fiat currency for innumerable transactions.

Forex Vs Cryptocurrency

Investing in either one of these markets is more or less investing in a game of chance. While both trades are quite similar in terms of how trading activities are carried out (electronic trade), demand and supply influences, trade risks, volatility etc., their highs and lows tell the difference. 

  • When it comes to liquidity, depth and stability, the Forex market (largest market) stands tall as it is more stable and offers more trading volumes (tremendous success) when compared to bitcoin which operates on a much more smaller scale.
  • For Forex, the amount of foreign currency in circulation at a particular time is regulated by a central authority and as such, certain economic issues like inflation, geopolitical issues, and even natural disasters can affect the rates of the market. This is not the same for cryptocurrencies such as bitcoin as no inflation can affect it.
  • Forex presents extensive leverage and as such present you with opportunities to make more.
  • Bitcoin is quite vulnerable as it is prone to hacking. But with Forex, since financial institutions are the anchors, your investments are safe. 
  • The involvement of financial institutions in Forex trade places mere retail traders at a competitive disadvantage when standing against higher traders such as investment banks. This is totally different for bitcoin as traders are free to trade without unnecessary competition.
  • While both are dependent on demand, with fiat currency in Forex there is this sense of security. How about waking up to see a ‘no demand’ on this virtual currency?

Forex and cryptocurrency trading both furnishes investors with a number of highs and low so it will not be wrong to say that the question of profitability is relative. It boils down to individual financial goals, available resources, those that are trading, how they are going about it and how much risk they can absorb.


Bill Adams has been into online currency trading for over 5 years. After taking a short course about Forex and Cryptocurrency, he decided to put his knowledge to good use as a writer and trader at TenkoFX. His Educational background in Business Administration and Economics has given him a broad base from which to approach Forex and Cryptocurrency topics.

One Response

  1. Mike Henry January 16, 2019

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