January 2022


Cryptocurrency trading and FX (foreign exchange) trading are two different activities, but some similarities exist.

Cryptocurrencies are digital or virtual tokens that employ cryptography to verify and manage the creation of new coins. Bitcoin was the first cryptocurrency to be developed in 2009.

Cryptocurrencies are decentralised, thus they are not governed or regulated by a government or financial institution. The goal of continuous trading is to make money by buying and selling currencies in order to profit from currency fluctuations.

One similarity between crypto and FX trading is that both involve buying and selling assets. Another similarity is that both can be risky ventures with no-return guarantee.

Differences between the two types of trading

First of all, cryptocurrencies need to be mined, which means they require sophisticated software and a vast amount of processing power to decrypt algorithms before you can use them.

Cryptocurrencies also have an advantage over physical currencies in that you can transfer them around the world almost instantly for meagre transaction fees.

In addition, owning cryptocurrencies does not mean ownership of any asset beyond the value itself, which is one thing that differentiates it from FX trading in Dubai.

On the other hand, FX trading involves trading with real currencies such as the UAE dirham or US dollar. You own part of another nation’s economy or business when you invest. It’s one way to diversify your money and protect it.

Trading foreign currencies also have the advantage of not being affected by inflation like local currency units, which makes them more valuable over time.

Although FX trading offers more safety than cryptocurrency trading because it trades with tangible assets, both types of trading can be risky. It is possible to lose all your investment through either means if you don’t know what you are doing.

To ensure this doesn’t happen:

  1. Ensure you know how to trade before opening an account with a forex broker or crypto exchange.
  2. Learn as much as you can about cryptocurrencies and their complexities before committing any money towards investing in them.
  3. Check for brokers that have been authorised by regulatory bodies such as the Emirates Securities &Commodities Authority in Dubai.

Advantages of crypto trading and FX trading

Cryptocurrencies are digital or virtual assets that use cryptography to verify and secure transactions, as well as create new ones.

Cryptocurrencies are not controlled by governments or financial institutions, which makes them more difficult to regulate than traditional currency. FX trading is the practice of buying and selling currencies in order to profit from changes in price.

One similarity between crypto and FX trading is that both involve buying and selling assets.

Another similarity is that both can be risky ventures with no-return guarantee.

10 Fun Facts about Cryptocurrencies in Dubai

  1. Cryptocurrencies are legal in Dubai.
  2. The Dubai government is supportive of cryptocurrencies and blockchain technology.
  3. The UAE Central Bank issued a warning against investing in cryptocurrencies, but this did not stop the Dubai government from continuing its support.
  4. The first Bitcoin exchange in the Middle East opened in Dubai in 2013.
  5. Several startups in Dubai are working on innovative cryptocurrency projects.
  6. In 2017, a company in Dubai became the first in the region to offer salaries in Bitcoin.
  7. The Dubai International Financial Centre (DIFC) announced plans to launch a cryptocurrency exchange in 2018.
  8. The UAE is planning to launch its cryptocurrency called emCash.
  9. Cryptocurrencies are being increasingly used in Dubai for payments and trading.
  10. Dubai is quickly becoming a global centre for cryptocurrency innovation and adoption.

In Summary

When trading with cryptocurrencies or FX, you can always consider opening your trades in options contracts to protect yourself against losses.

If you are dealing with Dubai based brokers, sign up to trade bitcoin Dubai.

They provide free tips and advice on using options for trading purposes, including cryptocurrency trading.

If you open a call (to buy) contract, the seller is obligated to sell if the buyer decides to exercise his right back; this gives you legal ownership of the asset at a set price.

If you short (or write) an option, you would be obliged to purchase it at a fixed price regardless of whether the market moves up or down.

A new trend has reinvigorated the cryptocurrency industry, even though asset values remain 75% below 2017 levels. It’s called DeFi, short for “decentralized finance. It is based on the idea that cryptopreneurs can recreate traditional financial instruments in a decentralized architecture, without being controlled by companies or governments. With new claims about the cryptocurrency Tether, the arguments for decentralization are becoming more and more relevant.

Decentralized finance (DeFi) is a set of specialized applications and financial services based on a blockchain (a continuous, sequential chain of blocks containing information built according to certain rules).

Simply put, DeFi makes finances available to anyone: users conduct transactions and resolve financial issues directly with each other, rather than through intermediaries like banks, brokerage courts, etc. Decentralized ecosystem software allows buyers, sellers, lenders and borrowers to interact.

Bitcoin and Ethereum are the first applications of DeFi. Both cryptocurrencies are controlled by large computer networks rather than centralized control. Many investors use bitcoin as gold, that is, an inflation-proof investment tool, while Ethereum is a useful (and controversial) tool for raising collective finance for startups.

The difference between centralized (CeFi) and decentralized financial systems is how their users achieve their goals. In CeFi, users rely on the people behind the business and the regulatory laws. With DeFi, users rely entirely on technology, software code, and encryption algorithms.

Wellfield company

One of the most recent achievements is Wellfield. The company was created to open the door to DeFi for ordinary people. The company currently has two brands, MoneyClip and Seamless. While DeFi, which is a development of Seamless, won’t launch until 2022, MoneyClip’s app will officially launch in late 2021, and they’ve been in development since 2019. Those who wish can install the beta version, which is already available in the AppStore and Google Play. The official launch of the app is expected in the coming weeks.

The MoneyClip app may be the missing link that will allow DeFi to take over the world. The main reason this app will be revolutionary is that it will allow you to access DeFi products simply by connecting your bank account to the app. Of course, other companies have tried to develop similar solutions before, but they didn’t get enough publicity or were so inconvenient for users that they didn’t gain enough popularity. That won’t happen with the Wellfield app.

DeFi boom

The DeFi boom occurred in the midst of the coronavirus pandemic. In 2020, the decentralized finance market was growing steadily, adding several billion dollars each month. “The very idea that anyone, anywhere in the world can access a system where you can make transfers and choose your own financial risks is very powerful. It’s something that until now has been inaccessible to many,” Vitalik Buterin, the founder of Ethereum cryptocurrency, said in 2020.