People often wonder that if Bitcoins and other virtual currencies can be used for transactions across countries like different currencies then why they cannot be used for trading in a similar fashion like Forex. So here are some things that you should know and that will also help you understand the difference between the two kinds of currencies and their trading.
Before we go ahead you must know it is easy to make some cryptocurrencies even without knowing anything about trading or mining processes. This has become possible due to robotic software systems like the Bitcoin Loophole which has garnered several positive reviews from investors and critics alike. Coming back to the topic about the differences between the Forex and Cryptocurrency trading here are some basic differences.
- The first point is that the prices of both currencies are governed by the supply and demand principle in the market. Their prices fluctuate with the rise and fall in the demand in their volumes. But the demands are ruled by different parameters. The various paper currencies are governed by the changes in political scenarios and natural events across the world. On the other hand, the Bitcoin and other currencies are mined only through the online process and are limited in their quantities. Their prices may not be affected so much by similar factors.
- Trading digital currency is still an alien concept. We can see and feel the other currencies in paper form and the virtual currency remains that only – in a digital wallet. It is not tangible and therefore many-a-times people feel odd about trading in digital money – which seems like a notional idea or just a concept.
- The doubts about this money are still plaguing the mindsets of people in many countries and you cannot be sure about the real value of these monies until there is some clarity about the legal status of these different types of currencies from the entire global perspective.
- Over the counter contracts and derivative trading are still not possible in digital currencies though these may happen sooner or later.
The regulatory bodies are not sure about the way digital currencies are moving or how the different countries will allow their use. They have not been able to set some specific regulations and standardized rules when it comes to trading in virtual currencies. The time has come to change the mindsets and bring in the new ideas into the stock market. You can start trading using these currencies if you feel confident about the trading system and you are aware of the pros and cons of digital money.