The foreign exchange (forex) is the largest market in the world, and it involves many different currency pairs such as EUR/USD, USD/JPY, or EUR/GBP. Forex uses fiat money to trade. Bitcoin is just a single coin out of many similar ones. Cryptocurrency trading involves buying one cryptocurrency to another.

Cryptocurrency has made headlines over the past ten years. Although it is still a fledgling currency, cryptocurrency is known the world over, but still not as trusted. It is a virtual or digital currency, which uses cryptography for security.

Before opening a position on a trading platform, there are five significant differences between forex and Bitcoin:


Liquidity is the ease with which an asset is convertible to cash without changing its current market cost. In the foreign exchange market, liquidity is mostly dependent on the currency pair on trade. The most favoured currencies usually have the highest daily trading volumes. For example, the .U.S. dollar has $2.2 trillion daily trading volume, and the Euro has €800 million worth of trade.

Bitcoin, in contrast, is not as liquid as forex since it is not yet a globally accepted currency. The daily value of Bitcoin in U.S. dollar at the beginning of February 2019 was $320 million. The reason for this being that bitcoin cannot buy goods and commodities with Bitcoin with the same ease as fiat cash.

Markets that have low liquidity like Bitcoin or other currency pairs, it may be hard to get a market participant to buy or sell with you on any trading platform


An asset is volatile if it goes through many highs and lows in a very short period. Bitcoin, in comparison to forex pairs, is more volatile. The reason behind this is that forex pairs move in narrow bands and rarely experience massive value shifts on the trading platform.

However, since forex pairs move daily high trade volumes, forex pairs still end up moving high amounts within these bands. Bitcoin, on the other hand, moves in a more significant manner, sometimes shooting up to thousands of dollars in one session.

Bitcoin’s volatility is caused by the fact that a minute number of people hold a large portion of Bitcoin. This means that if a single trader with a large amount of Bitcoin sold their share, it would crush the market.


When compared to forex, Bitcoin is relatively new on the trading platform. The blockchain technology used in Bitcoin is still in its infancy stages. The fact that Bitcoin is new, and the fact that it is volatile, makes the most people fear the risk involved, as there is no guarantee for the future.

Another fear is that a hacker might get a hold of the private access key to the Bitcoin wallet where buyers keep their coins. The technological nature of cryptocurrencies gives rise to unique risks that in forex does not have.

The primary risk in forex is factors that might affect the currency pairs’ price, such as interest rates between two currencies in a pair. Typically, the higher the interest rate, the stronger a currency is in the international market. With a higher interest rate, foreign investment increases in that particular country, thus driving up the price of their currency because of the high currency demand.


The Hong Kong Securities and Futures Commission (HKSFC) regulate Forex. Which regulates all financial firms that operate in Hong Kong.

Fellow participants that are on the blockchain network that Bitcoin relies on for data processing verify Bitcoin transactions. In Hong Kong, since Bitcoin is regarded as a virtual commodity and not a currency. Any financial body such as the Hong Kong Monetary Authority (HKMA) or Securities and Futures Commission (SFC) does not regulate Bitcoin.

The difference lies in that if a hacker infiltrating the system stole Bitcoin traders’ coins, they would have no way of getting the coins back. Forex is required by the regulators to put up safeguards to guarantee fund safety


Bitcoin is yet to take root in the trading markets. People are prone to resisting change, and they stick to forex because it has been tried and tested for years. Maybe with time, the international community will warm up to the Bitcoin idea, but for now, forex still seems to be the most trusted form of currency trading.

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