Crypto, Stocks, or Forex. What’s Better To Invest In?

With cryptocurrency’s current success, traders wonder: Crypto, Stocks, or Forex? Where should I begin my trading journey? While there is no fixed answer, looking at the dynamics of each market can be a useful measuring tool for determining your compatibility and chances of success.

From This Article, You Will Learn:

As soon as cryptocurrency started booming more than a decade ago, forex and stock traders immediately shifted their focus to this new source of profits. Of course, the sudden surge also made everyone else ask the same question: What’s better to invest in – Crypto, Stocks, or Forex? While the answer to this question is far from definitive, it largely depends on your trading skills, experience, market understanding, and market conditions. As far as crypto and forex are concerned, here are a few key factors that can help you figure out the kind of trading stance you should be taking:

Crypto Stocks or Forex. What To Look At?

Cost of Trading: The costs you pay for trading Forex is significantly lower than cryptocurrency, some of which can be extremely high based on popularity and demand.

Major Price Drivers: Forex is generally impacted by macroeconomic and international factors, whereas cryptocurrency is affected by microeconomic factors like personal choice and popularity.

Market Hours: Forex trading only happens on weekdays, whereas crypto trading never stops.

Exponential Trends: Forex seldom sees exponential growth or drops events, while it is much more common in crypto trading.

Accessibility: Major currencies are offered by all brokers globally, whereas crypto is still catching up to get the same level of availability from brokers.

Volatility/Leverage: Forex trading works with high leverage and low volatility, whereas crypto trading involves low leverage and high volatility.

Each type of market has its unique dynamics.

Trading Forex. The Best Option For Beginners

Forex is a foreign exchange market, the subject of which is international currency exchange (including, for example, EUROUSD, BGBPUSD, CFHUSD, USDJPY, USDAUD etc.).

It is the largest international financial market whose features are large and liquid. Forex trading is open five days a week, 24/7 (the market is closed on weekends). Trading starts at 22:00 UTC on Sunday and continues until 22:00 UTC on Friday.

To gain access to the forex markets, you must have access to a broker, e.g., the SimpleFX forex trading platform. Compared to stocks and crypto, access to the currency pairs market is quick, easy, and relatively cheap. You can avoid incurring high costs of transactions, data access, or quotes.

If you are wondering what’s better to invest in – crypto, stocks, or Forex you should think about the cost of accessing the forex market, which is negligible. All you need is a computer (or smartphone), Internet access, and Forex trading platforms such as SimpleFX.

Trading Crypto. Is It Still Worth Investing In Cryptocurrencies?

Investing in cryptocurrencies is generally risky, especially for people just starting to invest. Nevertheless, they offer a chance to achieve unimaginable profits. You should know that the value of the most famous cryptocurrency in the world, bitcoin, started from the level of one US dollar in 2011. In 2021, it reached a price of over USD 40,000!

Trading cryptocurrencies on exchanges is not much different than trading ordinary stocks. The rules are the same: you buy cryptocurrency cheaper and sell for more. The longer your investment period, the lower the risk of loss and the greater the risk of profit. If you are thinking about throwing in your life savings for a month, hoping it will “grow,” skip it.

Of course, you may earn even a lot. But be aware that you are risking a lot. Why? Because cryptocurrencies are subject to significant price fluctuations, much greater than stocks on major exchanges. The standard is that in 1 day, some crypto can grow or decrease by 30-50%.

A chart shows Bitcoin’s value’s ups and downs between 2017 and 2022. (Source: SimpleFX Crypto Trading Platform).

Thanks to the availability of cryptocurrency futures contracts, you can earn (or lose) on increases and decreases in their prices. What’s more, you can play with leverage, i.e., make transactions with a value much greater than the amount you have in your investment account.

Trading Stocks. What You Need To Know?

In some ways, stock trading is very similar to bitcoin trading, especially if you don’t focus on the big names. The success of small stocks depends on the company’s performance, just as cryptos function as derivatives of other coins like Ethereum. Stocks are also in a similar market spectrum.

The main skills required here include knowing the level of public interest and the venture’s stability. It is also a great starting point for newbies looking for crypto, stocks, or Forex investment opportunities. They can begin their trading careers here as they can find countless stable stocks with minimal chance of losses while they learn the ropes of high-risk trading on the side.

Crypto, Stocks, or Forex. What’s Your Best Option

With all the factors being considered, there is no simple answer for anyone. When asking what’s better – crypto, stocks, or Forex it depends on the skills and experience one brings to the table. While stocks are a great place for people to start slow and easy, forex and crypto can provide great opportunities for making money and taking risks as long as you know your strengths and weaknesses.