Why Forex Traders Should Bolster Their Portfolio With Cryptocurrencies

One thing forex traders all have in common is their risk appetite, but the word “cryptocurrency” makes some turn green or denounce it immediately. Saying that was the full story would be obscuring reality, because some just don’t know.

The world is familiar with the common currency trading pairs and it doesn’t take extensive research to know their value, as well as knowing the ones which are thought to be over-valued and due a correction. When money is on the line, familiarity always makes people more comfortable with investing which is why many miss out on the fertile trading opportunities found in this exciting market.

When weighing up stock trading vs forex, forex has a lot more things in its favour when it comes to trading options, the most notable one being the high liquidity and volatility of the market, meaning greater opportunity for gains, despite the interconnectivity between the two.

Different types of trading styles suit different types of people, but there’s a reason why large volumes of capital are traded on the Forex Market daily; $5 trillion to $200 billion on the stock market. If you were to ask why this is, you’d get two answers; high liquidity and volatility, and this is one of the greatest drivers behind the undeniable asset cryptocurrencies have been in the portfolios of especially savvy forex traders.

Volatility is the vitality that forex traders thrive on, it provides them added focus when their investments show signs of paying off, and a new confidence in their choices and research, which leaves them energised. There is no currency as volatile as cryptocurrencies, which is reason enough for it to be an interesting asset.

Cryptocurrencies as of late have been drawing attention due to the price spike it’s been experiencing over the past month, having more than doubled in value since the December crash last year. Despite the efforts of analysts, it’s hard to identify the cause of the jump. At the start of the year, despite the crash, some thought that the increasing mainstream appeal of the cryptocurrencies amongst financial institutions who had previously dismissed and discouraged the use of the them, would make a rise inevitable. News of Fidelity, one of the world leaders in asset management planning on buying and selling bitcoin was just one of many signs of this.

In a story which proves that good can come out of a bad situation, we have heightened integrity for the view of bitcoin as a legitimate currency. This happened after hackers stole $40 million worth of bitcoin from one of the world’s largest crypto-exchanges, Binance. The reaction to Binance’s CEO, Changpeng Zhao suggestion of the rolling back of the blockchain to reverse the unlawful transactions and recover the funds being so hostile from the community reflected the message that as a currency it’s censorship resistant, and tampering would not be accepted by the community. This in part led to bitcoin purchasing with heightened confidence in its validity as a currency.

When you come around to the idea of investing in cryptocurrencies such as bitcoin, you may look at the price and have cold feet all over again. However, one advantage of cryptocurrencies is that you can part of a bitcoin to suit your budget and with it allowing you to buy parts of a bitcoin for up to eight decimal points.

Unlike with forex markets, cryptocurrency market trading can occur every minute of the day, every minute of the week, as opposed to being limited to weekdays. As most traders are part-time, this allows many to be more involved in their trading as they have more time to trade over the weekend.

Most concerns with cryptotrading can be debunked with little fanfare, and it offers many benefits in bolstering your financial portfolio. It’s smart to diversify your investments, to help reduce the degree of being exposed to risks if your investments are tied to specific segments of the market – the aim is to not wake up to a sea of red and panic.

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