8 Differences Between Forex vs Crypto Profitability

What are the differences between forex vs crypto profitability? Any form of trading, whether it is crypto or forex, is not easy though you may think that it is just an art of making a profit from the price differences, which is buying an asset at a lower price and selling the same off at a higher price.

However, the truth is that it will need a lot of hard work and much better knowledge than the basics to make significant profits.

You will need to do a lot of analysis and analytical thinking, understand and use different software and tools, create and follow a sound and productive trading psychology, know the right time to place orders for trade and, most importantly, have lots and lots of experience.

If you are a newbie in investing, this may not be easy for you. You will actually not know which among the two is the best option to go ahead with and is more profitable.

The best way to start is by knowing the difference between the two. This article will help you a great deal in that aspect. Check out Crypto vs Stocks vs Forex.

8 Differences Between Forex vs Crypto Profitability

Differences Between Forex vs Crypto Profitability

It is true that both the forex and cryptocurrency markets are quite lucrative and popular in nature, but you should not enter into either of these markets with the hope to make a quick buck.

This is because the rate of success to make a profit with either forex or crypto is less than 1%. Nevertheless, that does not mean you should avoid these two specific financial markets considering the tiny percentage of profitability.

However, when it comes to choosing either of the two markets, it may be quite difficult, unless you know the differences between the two.

Once you know that, you should give either of them your undivided attention after spending probably weeks on proper and thorough research.

1. With Respect to Time

First of all, time plays a very crucial role when it comes to investments. While forex investments will enable you to gain in the short term just as cryptocurrencies where you can close your positions quickly, but it is much faster in comparison to cryptocurrencies.

This means that it is far easier to make small profits by making the most out of every trading opportunity that may come by within a much shorter period of time.

On the other hand, it is an entirely different story with cryptocurrencies. The market is extremely volatile which means that the price of the crypto coins may rise or fall significantly in a quick time.

This is why most critics do not consider cryptocurrencies as profitable currencies at all but just as a precious good of a specific kind.

This means that when you are investing in cryptocurrencies, you are actually making a long-term investment. The results are not as quick as forex trading and you may have to wait for several months when it starts to pay off.

2. With Respect to Activity and Experience

In forex trading, you should be more active and also have a lot of knowledge about the market to make things more profitable.

This is because the more you trade in this market the higher will be your chances to make profits. This knowledge will also need you to know the exact time to make a trade or to make an exit.

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This will increase your chances to make profits significantly. Using different trading tools and combining them with your experience things can really turn in your favor in quick time and in succession.

On the other hand, it will not provide the same kind of results in terms of profits if you apply the same tactics in crypto trading. It is too risky to do so because there is a lot of money at stake, especially if you are dealing with Bitcoin.

Therefore, in this specific type of trade you will need to stay active and also have some experience to make profits but more so you will need to be patient and have an infinite amount of self-control.

This will prevent you from making any transaction due to panic and sell your crypto assets when it is not optimally feasible and incur significant and irrecoverable losses.

3. In Terms of Inherent Risks

There are no two ways about it – crypto trading is far riskier in comparison to forex. The primary reason behind it is that the crypto market is highly volatile. Therefore, you will experience drastic changes in price, which includes a significant fall in the price of the assets which will result in an immense loss.

Add to that, the market itself does not have any central authority or governing body to oversee its activities and operations which means that it can also move in either way quite unpredictably.

This, along with less liquidity of the crypto assets makes this market prone to swings brought about by the influencing factors. All these factors make it less profitable to trade crypto coins.

On the other hand, the forex market is more profitable because it comes with fewer inherent risks. There are no wild swings in the market as well as in the prices of the products which makes it more stable and profitable.

The market is also less volatile and more liquid which adds to the opportunities to trade without apprehending a dramatic price change.

The risk inherent to this market along with the risks of incurring a loss in forex trading is further minimized by the central ruling and involvement of the government in the activities and operation of the forex markets.

4. In Terms of Trading Volume 

The trading volume is much less in the crypto markets in comparison to the forex markets. Though there are innumerable types of crypto coins available to trade, the fact that the volume is low across all crypto exchanges makes it less profitable.

Though the profits made in crypto are calculated in whole integers, it can only be made when you can predict the price movements most accurately while trading.

On the other hand, the forex market allows you to trade more in number and this volume, being more, increases your profitability rate. Even in bits and pieces, often in 3rd, 4th, or 5th place of decimals, the grand total will be much more than crypto.

In fact, the experienced forex traders always feel comfortable with the fact that the products here are not subject to unpredictable or dramatic price differences.

5. In Terms of Development

If you consider the crypto market, it is not as developed as the forex market. The main reason behind it is that this market is relatively young.

In terms of age, you can gain a fair bit of knowledge of it when you know that Bitcoin, which is the most commonly used and prominent crypto coin type, was launched only in 2009. Once again this adds to the risk factor as well as reduces its stability and profitability.

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On the other hand, the forex market does not need to appeal to the big players to take part in trading. They already do with large volumes and do not hold small positions as the beginners do in crypto trading.

Also, the trading level is quite high in the forex market which is a consequence of its highly developed features. Therefore, in a forex market you will see big players and market movers, large banks, and several hedge funds involved, which indicates towards its profitability.

6. In Terms of Technicalities

The forex market and trading are both very technical. It is also very time consuming, more so if you do not know about the technicalities involved in forex trading. It is not only an art that you need to master, but you should also know about the science behind it in order to muster profits.

Ideally, making huge profits is not impossible in forex but it is usually a forte of the experienced professionals. These professionals follow world news since the prices of the currencies traded in a forex market are usually affected by the government policies as well as the activities of the respective countries.

On the flip side, when you consider crypto trading, it is not as technical as forex. All you need to have is the basic knowledge about crypto and its market to start with. Ideally, even if you follow the simplest of all trading strategies which is ‘buy and hold,’ you can make significant profits even as a beginner.

You will not need to spend a lot of time gathering the news of the world. Just knowing what is happening around the crypto industry will be more than enough to trade profitably with crypto as a beginner.

7. In Terms of Cost and Leverage

The fact that crypto transactions are cheaper in comparison to forex trading makes it somewhat more profitable. Since there are no intermediaries involved in crypto trades, the cost is pretty less which does not add up even when you make multiple trades to eat up your profits.

However, in the forex market, there are brokers that you have to take help of and pay them their fees and commissions for the services offered by them. There may also be a few facilitators which in combination increases the cost of trades and thereby reduces the profit margin.

8. In Terms of Vastness and Liquidity

Finally, you should look into the vastness of the crypto and forex market and understand the liquidity aspect to determine which is more profitable. As for the forex market, it is the most active financial market in the world which is also the largest.

It has a daily turnover of 5 to 6 trillion US dollars on an average, and is counting. This, along with its higher liquidity aspect, enables a forex trader to make a better technical analysis which produces much better trading results and higher profits.

On the other hand, as far as the crypto market is concerned, it is valued at just between 10 and 20 billion US Dollars in terms of its average daily turnover. It is minuscule as compared to the vastness of the forex market.

Apart from that, not only are the crypto markets low in terms of liquidity, there are also a few issues related to it, especially when you deal with crypto coins with smaller market caps. All these lead to lower profits.

Which is More Profitable – Crypto or Forex?

Now, you may ask, which among cryptocurrencies or forex is good to go for making profits. Well, as always, such decisions are always subjective.

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Therefore, you will need to consider a lot of other factors apart from the differences between the two to arrive at a particular decision.

Ideally, cryptocurrency trading is not meant for everyone. As said earlier, you will need to be a lot more patient and controlled to trade with your crypto coins than with forex.

In addition to that, there are tens of thousands of crypto coins available in the market as of now and predicting which is good in performance and which is not is nearly an impossible task, especially for a beginner.

However, if you wish to deal with forex, you will actually deal with something that is a lot more concrete and stable. Typically, here you will have four major pairs almost always, apart from a few coins only crossed here and there.

This makes the forex market much more secure than cryptocurrency which, ideally, is good to be considered as a portfolio diversifier mainly.

However, this does not mean you should not consider the merits of virtual currencies. This market is still very young and is already showing its huge potential and promise.

Down the road, it has a lot more to offer and may also gain stability as forex so that the traders see it with much greater importance.

However, as of now, considering all the facts and factors, forex seems to be a much better trading option than cryptocurrencies among the traders and will continue to be likewise for some time now on a day-to-day basis.

Cryptocurrencies, on the other hand, are good to invest in for long term benefits and are also good for those people who can tolerate the risk of losing their money as well as the high volatility of the market.

Trading crypto can be best said to be a favorable option for those people who want to have the freedom of trading and investing without the need of any intermediaries such as banks, traditional financial institutions, and government bodies of the states.

At this juncture, it is good to keep in mind that both forms of trading are risky and there is no doubt about it.

This is in keeping with the universal principle that every financial asset that is tradable comes with inherent risks. But, crypto is just more volatile and therefore riskier than forex.

If you are a risk taker and know exactly how you can manage and minimize the potential risks, crypto can be your ideal option, or else, go with forex.

However, irrespective of the type you choose, you should practice using a demo account so that you know how exactly both the markets work.

It will also help you to figure out and create the most appropriate risk management strategy to make it big in either of the fields.


Trading in crypto or forex both involve risks but you can somewhat lower these risks with proper practice by using proper tools and by knowing the difference between the two. Hope this article will help you to make the right choice easily.