What distinguishes between Forex Trading and Bitcoin Spot Trading?
Trading – Have you known about Bitcoin? Virtual currency created in 2009 by someone who uses the pseudonym Satoshi Nakamoto. This currency is only provided in digital form so you will not be able to find it physically, such as Rupiah or Dollar.
Currently the use of Bitcoin has been increasingly developed and widely used. So what is the reason people start buying and using virtual currencies a lot?
This Bitcoin or BTC currency is developed with an idealism that a currency that is considered good will not be controlled by the central bank or the government. The occurrence of the financial crisis is a sign that the government is always experiencing negligence when trying to maintain a country’s economic stability.The government is considered to be always controlled by those who are corrupt and only works to gain profit only so that financial decisions will always side with the biggest money holders or conglomerates.
This concept is a special attraction for some people, especially for those of the IT world geeks. They began to invest the assets they had in the form of Bitcoin, besides that it turned out that the world economy was even considered to be more unstable, seeing the facts of the banking crisis that occurred in America and Europe.
So that Bitcoin is even more trusted to be a universal currency and commodity, as a result prices will continue to soar. This has been proven since January 2013, the value for 1 BTC traded and can reach a price of 13 USD, then in May 2013 it increased 10 times to 120 USD. Currently in December 2017 the price of 1 BTC based on data from bitcoin.co.id has reached 206,099,000 if it is in the rupiah, right?
Bitcoin has 2 features that are considered very attractive, first because of its anonymous nature, secondly because of the low transaction costs so that you can easily make transactions without having to provide an identity. You can maintain privacy to the highest level.
Then, who issued this money?
The new BTC currency will be created through a process called mining or miner (BTC miner). The role of the miner must be to use a highly sophisticated computer through ASIC computing so that it can decipher complex mathematics so that it can find new blocks for Bitcoin that are used to verify every bitcoin transaction in circulation. In return, the miner (miner BTC) will be given several Bitcoin.
The rewards that will usually be given for 1 block are 50 BTC (at the beginning), but over time it actually decreases because the circulation of Bitcoin has begun to increase and is also divided into more and more miners. In addition, the system has also been able to ensure that the maximum amount of Bitcoin circulating around the world is 21 million BTC so there will be no inflation.
DIFFERENCES OF FOREX TRADING AND BOTCOIN SPOT TRADING
As with forex, you can also trade Bitcoin by spot for traders who want to benefit from fluctuations in Bitcoin prices, complete with margin and leverage facilities.Then, what distinguishes forex trading from Bitcoin?
Forex supply will be provided by a central bank that has the authority to be able to oversee the circulation of money. Therefore, the supply factor will depend heavily on policies issued by the central bank. The economic condition of the country will also be very influential. While Bitcoin can be determined early so there is no new production continuity when the maximum supply limit has been met, which is up to 21 million BTC.
Bitcoin is considered to be an immune asset in the effects of inflation. Value on Bitcoin can often fluctuate for certain reasons including one of speculation that arises after a certain news release. While in forex trading that is closely related to cool currencies, it will not be able to avoid inflation, either price or monetary inflation because of the authority of the central bank that greatly influences each inflation risk.
One of the advantages of a centralized currency is that it can guarantee demand.Because it is directly controlled by the government and the application of conventional currencies in the economic system has no doubt. But this does not apply to Bitcoin because it is not a currency regulated by the government. There is no obligation that requires using Bitcoin because the currency is not circulating and will only apply to the vendor. So that the demand from Bitcoin will depend very much on the attractiveness of its users and the number of vendors who accept.
Bitcoin will be more suitable if used by traders who are high risk because the price will continue to move within a greater level of volatility than forex. If you compare it directly then the volatility in Bitcoin will range from 5% to 30% while forex is only 0.5 to 1%, which will depend on the pair whether using a major, minor or exotic pair.
- Trading Platform
You can trade Bitcoin on several types of platforms that will depend on where you register your account for spot trading. Traders such as Kraken, Binance, Bitstamp, Bitfinex, Coinbase, Bittrex, and many more. Variations in the instruments that will be displayed on the platform are usually other types of crypto currencies such as Litecoin, Ethereum, and others. While charts for conventional currency prices on the platform only focus on the US Dollar and the Euro.
You can also do forex trading on many platforms, even though the market share is still dominated by MetaTrader, but there are several brokers who also provide other alternatives such as SIRIX, cTrader and others.