Pros and Cons of Forex Crypto Trading

Bitcoin and some other cryptocurrencies regularly provide the opportunity to multiply a forex trader’s capital. With digital currencies the risks are relatively insignificant, since the trend in their price movement is mainly ascending. Having purchased the right cryptocurrency at the right moment, all the trader has to do is wait for its price increase. In fact, many traders have experienced the thrill of this “easy money”, so crypto trading has quickly become the buzz word.

Sometimes the volatility is so high that there is no need for leverage at all, and the profitability at the same time simply goes off scale.

The prominent trend now is that cryptocurrencies become more and more integrated in the Forex market. Forex brokerage companies simply can not ignore the phenomenon with such an investment potential – more and more of them offer attractive conditions for crypto trading. The logical question that arises here is: what’s the best way to trade cryptocurrencies?

There are two main options for trading Bitcoin and other cryptocurrencies:

There is, of course, another option with direct purchase of cryptocurrency and its storage on the wallet, but this is more suitable for the long-term buy & hold strategy. If you want to trade in the short or medium term, as well as make short transactions (sales), then you will have to choose one of the above options.

Let’s consider the pros and cons of trading through a brokerage company.

In general, Bitcoin trading in Forex and through a crypto exchange has a lot in common, right up to the usual MT4. However, there are a number of significant differences that you should be aware of.


  • There is no need to have a wallet for storing currency, as well as to study other specialized information. Indeed, trading through a forex broker frees you from having to learn a lot of technical literature. All you need is the ability to analyze charts acquired on Forex currency pairs.
  • A single trading platform allows you to trade all the assets of both forex and crypto at once. The exchanges, in turn, provide the opportunity to trade only cryptocurrencies.
  • The presence of leverage allows you to reduce the starting capital. When trading cryptocurrencies through Forex brokers, you get the same leverage as you would do with regular currency pairs. For example, you can buy 1 Bitcoin, having on hand only a small part of its value.
  • It is much safer to trade cryptocurrencies through proven brokers, than to trade through crypto-exchanges. We will discuss the risks of trading through the latter further in the article.
  • Crypto exchanges can hardly provide traders with a comfortable environment for full-fledged trading, suitable conditions and user interface that experienced market players are used to. Brokers have more than 20 years of experience in the field of online trading, their trading products are more developed, and customer service is more refined. Extended user interfaces, round-the-clock and timely support, a high level of security, the ability to trade from charts or via mobile applications, only a broker can fully offer all this.


  • Trading costs will usually be higher when compared to trading through exchanges directly. For example, for different brokers the bitcoin spread starts at $ 9.
  • Often unknown origin of quotations, which may well differ from those that you see on other exchanges. At the same time in controversial situations, most likely, you can not prove anything.
  • In some cases, there is no trading over weekends.

Trading Terms

Consider the trading conditions for cryptocurrencies on the example of a broker, who was one of the first to open to his clients the possibility of trading in cryptocurrencies. Currently 6 CFD tools are available. The remaining trading parameters are listed in the following table:

  Tool Spread Leverage Min. Volume
1 BTCUSD $31 20:1 0.1
2 ETHEREUM $3.6 10:1 1
3 ETCUSD $0.2 5:1 1
4 DASH $5.4 5:1 1
5 LITECOIN Mini $0.8 5:1 1
6 RIPPLE $0.0035 5:1 1000

This broker provides an opportunity to trade in the cryptocurrency market 24/7. That is, in this case, you can trade even on weekends, which is a good advantage.

Risks of trading through crypto exchanges

Cryptocurrencies were created with the purpose of decentralization and the impossibility of intervention by the state. From this supposedly obvious advantage follows a very unpleasant circumstance. All crypto exchanges are unregulated organizations in private hands. As a result, the probability of their bankruptcy is very high, or just scam.

The logic is approximately as follows: according to the official version, crypto-exchanges earn commissions from client transactions. But imagine that there comes a time when the capitalization of the exchange, namely the amount of client investments, exceeds, for example, the potential 20-year profit of the exchange from the commission on transactions. In such a situation, it is more profitable for the management to come up with a tale about some kind of failure, arrest, hacking, whatever, and declare itself bankrupt, rather than wait 20 years to get the same income. Client money, in turn, is transferred to other accounts.

Versions can be different, but the end result is usually the same: customers are left without part of their money. In principle, before this happened with forex brokers, but lately major players have emerged who can be trusted. In the case of crypto-exchanges, it is still difficult to talk about trust. Therefore, traders need to understand what they are going.

Prospects for the development of the cryptocurrency industry

Since the cryptocurrency industry is still very young compared to Forex, it is still in the process of its formation.

However, we can already say with confidence that it has won its niche. Even if it were a bubble, as some believe, it all became too popular and beneficial for everyone to take and "chop off the industry at the root." Yes, some cryptocurrencies will disappear with time, like the exchanges themselves, but the industry most likely will not go anywhere.

In our opinion, further events will develop according to the following scenario:

  • Legalization of cryptocurrency on the part of states and banks, which, by the way, slightly contradicts the main message of creating such currencies.
  • Inclusion of cryptocurrency in the list of instruments of liquidity providers.
  • The merge of cryptocurrency and Forex markets.

Why are crypto currencies so popular among forex traders?

Volatility creates many trading opportunities that involve both a high level of risk and a large potential profit. Therefore, many traders who focus on short-term trading strategies use cryptocurrency for their activities. The second reason is the rapid development of the market of virtual currencies. Now it is difficult to find a person who would not hear anything about cryptocurrency. The incredibly active advertising of this market, which can now be found in any financial publications (and not only in them), gave such a powerful message that people insistently ask brokers to give them access to these tools.

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