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Differences Between Trading Crypto and Forex: Liquidity, Trading Pairs, & Volatility

April 16, 2019


Differences Between Trading Crypto and Forex: Liquidity, Trading Pairs, & Volatility

In the last 24 months, cryptocurrencies have been all over the news. One of the main reasons is their meteoric rise in price. In December 2017, bitcoin reached a historically high price of around $20,000; a 20x increase from its starting price the same year.

Although the market situation has now changed, one thing is for sure. A number of “crypto millionaires” made 7, 8, and 9-figure profits by trading crypto during this time period. You may have seen some of them celebrating by buying yachts, cars, homes, and more online.

The question is, Is crypto trading still profitable – or is the boom now over? And more specifically, how does crypto trading compare to working with one of the most popular trading asset classes on the web: forex?

Comparing crypto and forex

Comparing crypto and forex - CoinCola

The most obvious difference between the two markets is size.

The Forex market is literally the biggest market in the world. Its daily trading volume is a whopping $5.3 trillion; many times more than the entire crypto space at its peak value. It’s decentralized and global.

The crypto market is far smaller than the forex market. Its current daily trading volumes stand at about $30 million: a relatively small number. Despite this, the crypto market can be far more lucrative for several reasons.

To understand why, let’s talk about the 3 key differences between the two markets.

1. Liquidity

As we already mentioned, the forex market has a much higher trading volume than the crypto market. This means that more people are buying more assets there, which in turn means that you can readily buy forex using whichever currency you have.

This is not always the case for crypto. Sure, you can liquidate Bitcoin and Ethereum tokens quickly and easily – but with altcoins, you may be less lucky. In some cases, you’ll have to accept a high fee or an inferior price to complete the trade.

2. Trading pairs

Trading pairs - CoinCola

In forex, there are maybe 30 commonly traded pairs. Most of the action, however, happens around key currencies like the British Pound, the Japanese Yen, the US and Canadian Dollars, etc. A regular trader may only consider 5-6 pairs on a regular basis.

This means that forex trading is relatively easy to follow. It also means that the competition for each pair is high, making it harder to trade profitably.

With crypto, things are a little different. It’s common to look at at least 10-12 pairs, and then there are also OTC market pairs that can help liquidate crypto coins. This creates more diversity, reduces competition, and often leads to higher profit margins.

3. Volatility

Volatile assets fluctuate in price regularly, making it relatively easy to make a profit – but also increasing risks. Conversely, stable assets are harder to trade profitably but less risky.

To date, crypto has been consistently more volatile than forex. This is why the asset class has created so many millionaires: it’s volatile, which makes it profitable to trade. Risks are higher too – but with careful risk management and the use of stop loss orders, these can be managed.

To conclude, crypto forex differ in two key ways. On one hand, forex markets are a lott more liquid. This means you’re less likely to deal with problems like slippage, but it also means that profit margins tend to be lower due to high competition.

Crypto, on the other hand, can be immensely profitable. Its drawback is that some bitcoins coins are less liquid. It’s also important to understand risk management theory when trading crypto because otherwise, losing money to volatility is all too easy.

Interested in trading or investing crypto: the most profitable asset class of the last 2 years? Then visit our website, We’re the cheapest OTC crypto marketplace in the world, and with over 100,000 monthly transactions, we’re also among the most reputable.

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About CoinCola

Founded in 2016, CoinCola is a Hong Kong based company offering both over-the-counter cryptocurrency trading and crypto-to-crypto pair trading exchange. CoinCola now serves millions of users from over 150 countries with our fast, secure, and reliable trading services. We support BTC, ETH, BCH, LTC, USDT, DASH, and XRP. Visit to invest in digital assets.

Disclaimer: Trading and investing in cryptocurrencies, also called digital currencies, crypto assets, and so on) involves substantial risk of loss. All informations are used at your own risk, and any content on this site should not be relied upon as advice or construed as providing recommendation of any kind.