The Inception of an ‘Augmented’ Foreign Exchange Market
A securities market wherein investors may deal directly with each other instead of looking up to a centralized system. Sound technology support enables the seamless functioning of the decentralized financial market. Real estate markets and foreign exchange markets are examples of decentralized markets.
As mentioned before the decentralized market makes use of digital media for essential communication of bid/ask prices in real-time. This allows buyers, sellers, and dealers to remotely transact in the specified securities. This is how the working of a decentralized market may be summed up.
Working of Forex Market
Forex trading is essentially the conversion of one currency into another. This is one of the most actively traded markets in the world, with an average daily trading volume of $5 trillion.
Foreign exchange functions as a network of buyers and sellers who transfer sovereign currency among each other at a price agreed upon. Forex serves individuals, companies, and central banks in converting one fiat into another. Individuals traveling abroad have had Forex transactions made.
Although foreign exchange serves quite a few practical purposes, the major portion of currency conversion is undertaken with profit-motive. The volume of currency traded daily attribute to price movements in some fiat, resulting in volatility. Traders gravitate towards market volatility with hopes of reaping high profits with increased risks in the market.
Forex and Crypto
Seemingly, the Forex and Crypto make for a highly unlikely pair despite the mild similarity in their working. Both the foreign exchange and the virtual currency are technology-reliant. Both forms of security trading follow a decentralized model. Both of these financial instruments are traded in pairs — precisely in terms of a few reigning currencies or coins.
Contrarily the asset classes are further apart in terms of volatility. In spite of the volatility of the foreign exchange market discussed above, they do not compare to the absolutely unpredictable volatility exhibited by their digital counterparts.
Secondly and strongly, the sovereign currency of a nation is controlled by their respective regulatory bodies. The supply of a currency is maneuvered by central banks, which can announce measures to significantly impact their currency’s price. Quantitative easing, for instance, is the process of injecting more money into an economy, causing its currency’s price to drop. This is also to say that a currency’s price is backed by a volume of reserve in gold or in reigning foreign currencies. This cannot be said about digital currency as they can boast of no such asset-backing. Their prices rise and drop as per market demand and supply and this is heavily influenced by the strong players in the market.
Forex for Crypto and Vice-versa: PayBito
In spite of the stark differences and seemingly low probability of mingling, the current trend states otherwise. There is a conspicuous rush among leading Forex broker firms to integrate a crypto exchange into their platforms. This implies how present Forex brokers and CFD traders have landed a novel opportunity in the crypto sector.
PayBito, a global crypto exchange, makes a concerted effort in devising ways of safe integration of crypto exchange with Forex exchanges — thereby making an ‘augmented’ Forex platform, a trend.
To Conclude
Creating or contributing to a trend makes for the highest possible impact in a given market. This ‘augmented’ foreign exchange market is the next trending service increment among Forex traders and is likely to expand the market by uniting both communities.
