Forex trading, or the foreign exchange market, is one of the largest financial markets in the world with an average daily volume of around $3 trillion (and growing). Despite its size, however, it’s still somewhat mysterious to those who aren’t involved in it daily.
At some point in their lives, everyone has heard about Bitcoin, xtb trading, and cryptocurrencies like it, but not everyone knows about forex trading or has given any thought to whether it might be worthwhile as an investment strategy. Check out Traders union article for details.
1) Increased Stability
Stocks are a volatile investment. One day, they’re soaring to record highs and you’re feeling like a genius for buying them—the next, they’ve plummeted by double-digit percentages and your gut instinct tells you it’s time to sell everything. Investing in currencies doesn’t involve nearly as much risk.
2) Low Transaction Fees
The two most common ways to make money in currency trading are buying and selling currency. When you buy a currency, you’re essentially agreeing to pay that country’s central bank in exchange for its local money, whether you need it or not.
When you sell a currency, it’s called selling short. And when an exchange rate drops unexpectedly, as they often do, you can lose all your money fast! With bitcoin forex trading, however, fees are generally low enough that shorting is possible if necessary. You could even save on transaction fees by accepting bitcoins directly from buyers or sellers rather than converting them into your national currency first. So be sure to ask!
3) No Minimum Amount Required
One of the biggest hurdles for forex beginners is that most brokers require a minimum deposit to start trading. This can be quite overwhelming for beginners who don’t have much money, so when choosing a broker you should choose one that does not require any minimum amount.
You will pay more in commissions, but you’ll be able to trade without making any initial deposits. Just make sure you read your broker’s fine print, as they may still limit how much you can withdraw and how often.
4) Tax Advantages
While traditional brokers have to report every trade and transaction, including purchases and sales, to tax authorities, companies like Revolut and foreign exchange brokerages allow customers to avoid paying taxes on their gains.
You’ll still have to pay capital gains tax on any investment profits or losses in your annual tax return, but you won’t be hit with a nasty surprise when filing. This is because investments made with cryptocurrency are not subject to income taxes.
Cryptocurrency transactions are typically very secure, depending on how they’re carried out. The most common way to use bitcoins is through an online exchange, wherein you transfer your fiat currency directly to a bitcoin wallet address that’s provided to you by your trading platform.
To deposit bitcoin into a cryptocurrency exchange or wallet, you need two pieces of information:
(1) the bitcoin address
(2) private key
Bitcoin forex trading is gaining popularity among investors worldwide due to the convenience and efficiency it offers to investors and traders when it comes to transacting in the forex market. Compared to other traditional methods of doing forex trading, bitcoin forex trading has proven to be both cheaper and faster, which can only mean more profits.