Do You Like Crypto But Dislike Exchanges?

With modern crypto trading, the majority of investors and traders are not huge fans of the major coin exchanges. While the platforms once served a vital purpose, there are now several more attractive alternatives for the millions of crypto enthusiasts around the world.

Many everyday investors use forex currency pairs to play the coin market, using pairs like USD-BTC (US dollar/bitcoin) as pathways for earning profits on price changes. While there are a few other methods for delving into the cryptocurrency marketplace without ever dealing with an exchange, forex is perhaps the most popular.

It’s certainly the simplest way to speculate and potentially earn money on assets like bitcoin, litecoin, ethereum, and others. Using FX (forex) as a substitute for direct ownership of coins suits the trading style of people who prefer to avoid the complexity of purchasing crypto via big exchanges. Why do so many fans turn to forex, and how do they get started learning about the critical pairs, setting up accounts, analyzing their favorite pairs, and gleaning valuable information from the daily news? Those vital questions, and a few others, are answered below.

IMAGE: UNSPLASH

Use FX As A Stand-In

The good news is that there’s no need to ever deal with a crypto exchange again if you are willing to trade foreign currency instead. That’s because several of the major coins are available as components of popular FX pairings. Depending on the particular brokerage firm, account holders can choose to take positions in bitcoin, ethereum, litecoin, cardano, and other cryptos. This popular type of off-exchange activity is available from the top brokers.

Check with your favorite forex trading website and see which crypto fiat pairs they include on their menu. The beauty of this approach is that there’s no need to deal with the expenses imposed by exchanges or purchase any coins directly. Nor do you need to hold assets in special wallets or leave them on an exchange where they are susceptible to theft.

Study The Important Crypto Forex Pairs

Be sure to check on the top traded pairs. There’s no definitive list, but most of the prominent forex sites and brokers offer BTC-USD and one or more others, like ETH-USD and LTC-USD. The bitcoin pairing with the US dollar is the most popular crypto fiat pair in existence and enjoys a massive daily volume on a consistent basis. While the other two are not as heavily traded as BTC-USD, the ethereum version is a close number two in terms of volume and liquidity. Litecoin’s forex coupling with the dollar is in third place due to its unique quality of being faster than its more capitalized counterparts, BTC and ETH.

Specialize Or Diversify With Crypto-Based Currencies

Consider your own style and preferences. Some people prefer to specialize in a single crypto forex pair, like BTC-USD. Others hope to achieve a measure of diversification by trading bitcoin, litecoin, and ethereum assets via the FX marketplace.

While most of the top coins experience price changes somewhat in tandem, there is plenty of uniqueness among the individual cryptos. Another approach is to choose time frames based on your work schedule and personal preferences. Options include day trading a single pair, swing trading several, or some combination of those approaches.

Tips For Analyzing USD-BTC

Fortunately, it’s possible to find plenty of useful information about the top traded FX crypto pair, BTC-USD. The process begins with exploring the trading chart for the pair, and it’s essential to remember that coins are much more volatile than prominent fiat currencies like the dollar. On some days, for instance, the swings in price for BTCUSD are breathtakingly large. Most people who trade the pair use the same kinds of technical analysis as they would on traditional FX currency pairs.

Look for long-term moving averages and compare them to short-term lines. Consider fundamental factors as well, like recent news stories about the US economy, developments in blockchain technology, regulatory legislation of cryptocurrency markets, and more.

Follow The News

What kind of news stories impact the prices of pairs like EURBTC and other crypto-based assets? Fortunately, there are several helpful categories to watch, including any reports about government regulation of the markets. New laws and rules in many nations are already in place or about to be enacted. Some of the new legislation has the potential to either stifle or encourage cryptocurrency trading.

Other topics to keep an eye on include announcements dealing with technological breakthroughs related to blockchain security, coin mining, and the trend toward digital fiat currencies. Knowledge is power, and in the world of buying and selling via FX platforms, it’s crucial to understand the day-to-day changes in the political, economic, and technological landscape.