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The forex and cryptocurrency markets have been in the spotlight in recent years, catching the attention of investors and traders alike. While these two markets have many obvious differences, they also share some similarities. In fact, there are many instances where they could also impact each other. Investors and traders who have a clear understanding of the correlation between the two, in both favorable and less-favorable aspects, would have an upper hand in terms of analytical capabilities.

The main differences between forex and cryptocurrency

Forex is the largest and most liquid financial market in the world, with a daily trading volume that exceeds $6 trillion, as stated by Bloomberg. In the case of forex, currencies are sold in pairs, such as EUR/USD or GBP/JPY. This is done with the goal of profiting from changes in exchange rates. According to Yahoo, Some traders prefer to work with exotic currency pairs, which include a major currency and a currency of a developing economy like South Africa or Mexico.

Cryptocurrencies, by contrast, are digital currencies that make use of cryptography, and operate independently of central banks. To backtrackcentral banks play a pivotal role in the forex market. It is also worth noting that cryptocurrencies carry more risk than forex and other CFDs due to the historically high volatility of crypto markets. This is why all top forex brokers in the UK regulated by the FCA have been banned from trading cryptocurrencies for retail investors from 2020.

The correlation between the two markets

Market sentiment is one of the main drivers that influences the correlation between the forex and cryptocurrency markets. When the sentiment is good, both forex and cryptocurrency markets tend to experience upticks in the form of increased buying activities, which typically lead to upward price movements. And of course, conversely, when market sentiment is negative, there are downward price movements.

Risk appetite serves as another correlation between the two markets. This refers to the willingness of traders and investors to risk big, in hopes of winning big. Thanks to the backing by central banks and governments, forex isnt risky by nature. But it must be stated that certain forex pairs can be more volatile and carry higher risk, especially in cases where emerging markets are involved. When it comes to cryptocurrencythe volatility is merely part of the game, and significant price fluctuations can be seen within short periods of time. According to Cointelegraph, crypto investors are usually more risk-averse and prefer to leave their investments on autopilot; they do not worry about daily price changes as much. On the other hand, traders thrive on taking risks and must have an excellent understanding of market volatility and conditions. By extension, traders and investors with a higher risk appetite are more inclined to invest in both forex and cryptocurrencies. This leads to a positive consensus and correlation between the two markets. Conversely, negative correlations come into play when traders and investors end up reducing their exposure to both markets. It is also worth noting that cryptocurrencies carry more risk than forex and other CFDs due to the historically high volatility of crypto markets.

In recent years, there have been cases of traders and investors incorporating cryptocurrencies into their forex trading strategies. In these instances, they would view cryptocurrencies as an alternative investment and would turn to cryptocurrencies as a potential safe-haven asset in times of geopolitical uncertainty. This is comparable to traditional safe-haven assets such as gold. These are the instances in which changes in the value of cryptocurrencies would potentially impact forex markets, due to perceived risks and opportunities in the overall market. Cryptocurrency-related financial products, such as cryptocurrency futures, options, and exchange-traded funds created further overlaps between cryptocurrencies, and forex.

The correlations is not always consistent or predictable

While there are some correlations between the forex and cryptocurrency markets, it is worth noting that they are not always consistent or predictable, and the reasoning quite obviously boils down to market performance. The hours of operation, as stated on Kiplinger, are very different between the two, as forex markets see daily trading 24 hours per day, 5 days per week. Crypto markets not only see the same type of nonstop weekday activity that action extends to weekends as well. Both of these markets are influenced by factors that include economic indicators, geopolitical events, central bank policies, market sentiment, technological developments, regulatory changes, and investor sentiments. Collectively, these factors can lead to opposite movements in their respective markets, leading to a more negative correlation as a result.

For example, in certain situations, forex and cryptocurrency markets may show divergent movements that trace back to differences in market structure and liquidity. Additionally, regulatory changes or announcements related to cryptocurrencies would naturally impact the correlation between forex and cryptocurrency markets. For instance, if a major economy announces bans on cryptocurrencies, it would likely impact the sentiment and prices of cryptocurrencies. Conversely forex markets would remain largely unaffected amid the chaos. This would also apply if there was institutional adoption of cryptocurrencies, as it would impact the sentiment and prices of cryptocurrencies, and again, forex markets would likely remain unchanged.

At the end of the day, while there are some correlations between forex and cryptocurrency markets, the relationship between the two is complex, and involvement in both isnt for the faint of heart. That being said, seasoned traders and investors are in the best position to analyze and understand the dynamics between the two, while novices in these realms are better off seeking expert advice to make the most informed business decisions.

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Forex and Cryptocurrency: Correlations That Traders and Investors Need to Be Aware Of - ShareCast

Dubai: Investments in cryptocurrencies have been consistently declining after peaking in November 2021, with trading volumes dropping to sizably low levels since then. Is there an end in sight to this prolonged season of, what experts refer to as, crypto winter? If not, should investors be worried?

Cryptocurrencies are still down over $1.5 trillion (Dh5.5 trillion) in value since the height of a massive price rally in 2021, with the total market valuation currently standing at $1.2 trillion (Dh4.4 trillion) along with the volume of daily traded crypto at $70 billion (Dh257 billion).

The crypto winter also wiped out over 67,000 crypto millionaires since peaking at about 100,000 in 2021 and last month alone, trading volume of the worlds largest crypto token Bitcoin, which makes up majority of the overall market, plummeted by almost $700 billion (Dh2.57 trillion).

It is estimated the total market value of cryptocurrencies went down dramatically, particularly between May and June 2021, as the digital coins became less likely of an investment tool, wrote Raynor de Best, a researcher at Statista, an online market and consumer statistics database.

Image Credit: Statista

Is cryptocurrency still valuable as an investment today?

The price of Bitcoin has been erratic, and most other cryptocurrencies follow its larger price swings. This volatility attracts investors who hope to buy when the price is low and sell at its peak, turning a profit, Raynor de Best added. However, this does little for price stability.

Most of the cryptocurrencies still lag much behind their all-time highs. Bitcoin is still down 50 per cent from its record high touched in November 2021 at $69,000 (Dh253,400), and Ethereum, now trading at the levels of $1,900 (Dh7,000), touched an all-time high of $4,000 (Dh14,689) in 2021. But its not all bad news.

Much to the relief of investors, Bitcoin and Ethereum are staging somewhat of a recovery now. Bitcoin has risen almost 80 per cent this year and similarly Ethereum has almost shown a rally of 65 per cent till this time of the year. So the digital investments cannot be written off just yet.

- Brian Deshell

So even though cryptocurrency trading volumes are still far lower than before, the good news is that, 2023 has been able to absorb all the major losses which the market suffered in 2022, said Brian Deshell, a UAE-based cryptocurrency trader and analyst.

If we look at the April figures, then Bitcoin and Ethereum have surged 17 per cent and 46 per cent, which is a remarkable feat. Similarly, rival token Cardano (ADA) has also clocked more than 50 per cent gain in the first four months of this year and has a market value of $13.3 (Dh50) billion.

Why are prices of cryptocurrencies still far lower than before?

The prime reason for the market downturn is the downfall of one of the largest global cryptocurrency exchange, FTX. FTXs bankruptcy has not only triggered a huge sell-off but has also reduced liquidity from the crypto market.

Multiple issues with FTXs finances and regulatory investigations stunned crypto investors and left Bitcoin to tumble to the lowest level in two years, added Deshell. The surprising turn of events also led to a turmoil like situation in the crypto industry.

Image Credit: Shutterstock

This resulted in high level of distrust and skepticism among the investors towards crypto establishments and on the regulation front. The FTX contagion effect is quite evident, several questions have now been pointed out on the survival of other crypto trading firms worldwide.

So while the slump last year was triggered by the collapse of FTX, which handled around $1 billion (Dh3.67 billion) transactions each day, its collapse is having a knock-on effect on other crypto exchanges, and this poses a threat to the pace of recovery of the cryptocurrency market even today.

Verdict: Should you be worried about your crypto investments today?

The bottom line is that the cryptocurrency market has seen worse and the crypto market has literally gone through the roughest storms during the past few years. But as the burnt crypto market now has a fresh start and is showing positive signs of a recovery, should investors still be worried?

If you are an experiences or a seasoned investor, crypto experts widely believes that in this kind of scenario, you can look up to invest in stable digital coins such as Bitcoin or Ethereum, but should only give 5 per cent exposure to cryptocurrencies in their overall investment portfolio.

- Brian Deshell

This is because cryptocurrency prices are still highly volatile and extremely speculative, so it is advisable to invest only an amount which you can afford to lose, particularly if youre an investor new to incredibly risky asset class.

As to whether or not the investment will turn more stable in the near future, while there is still uncertainty on that front among industry analysts, with more global crypto regulation around the corner, the digital currency can get steadier in the months to come. But only time will tell for certain.

With cryptocurrencies, it is always better to not impulsively invest. Moreover, for a new investor, now is also a crucial time to observe how the cryptocurrency market performs, as once this chaos fizzes out, you may be able to find your favorite digital asset at a much fair value, Dshell added.

See the article here:

As global interest wanes, should you now be worried about your crypto investments? - Gulf News

The rise of cryptocurrencies has sparked a new trend in employee compensation. Businesses across the world are beginning to offer their workers the option to receive payment in Bitcoin, Ethereum and other digital currencies. The idea of cryptocurrency as a part of a benefits package is straightforward: in addition to fiat currency, an organization pays its employees with a cryptocurrency like Bitcoin (BTC). This can be implemented multiple ways, either as a portion of regular pay, bonuses, one-off gifts or in place of a 401k matching plan. Employees can opt-in to allocate a portion of their weekly or monthly earnings to whatever digital asset they like, and it shows up instantly in their wallets.Though the mainstream may view cryptocurrency as an investment, individuals and businesses alike continue to adopt it as an alternative form of payment, whether its to buy consumer goods or pay employees. Internal BitPay data shows that crypto payouts have more than tripled over the past several months.Integrating cryptocurrency into an organizations benefits package brings a slew of benefits for organizations and employees alike.From a branding perspective, payments in crypto shows that an organization is looking towards the future and modernizing. Cryptocurrency users are often young, digitally-savvy and high-income earners. Adding new and attractive benefits like crypto payroll can help entice star-prospects in a competitive field.

Full commentary : Cryptocurrency in the Workplace: An Innovative and Cost-Effective Benefits Strategy.

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Cryptocurrency in the Workplace: An Innovative and Cost-Effective ... - OODA Loop

The B.C. Securities Commission alleges a now-defunct cryptocurrency platform based in Nanaimo on Vancouver Island committed a multimillion-dollar securities fraud by diverting customer assets to online cryptocurrency gambling sites.

In a notice of hearing issued last month, the commission says David Smillie and his numbered company, which did business as ezBtc, lied to customers about its crypto asset trading platform.

The commission alleges Smillie and the company diverted about $13 million worth ofbitcoinand ether, another cryptocurrency, to two online gambling sites without authorization from customers.

The regulator says the company was dissolved in October 2022, but between 2016 and 2019 customers transferred 2,300bitcoinand 600 ether tokens into wallets hosted by the platform.

Smillie and the firm allegedly told customers their digital assets were mostly held off-line in so-called "cold storage,"but they never truly maintained enough to cover users' assets.

Smillie and ezBtc were never registered under B.C.'s Securities Act, and the commission claims agreements with customers amounted to futures contracts, which fall under the commission's jurisdiction.

Online court records searches show the company and Smillie face a number of lawsuits in British Columbia dating back several years, and the B.C. Securities Commission's director of enforcement Doug Muir said the hearing notice comes after a lengthy probe into the firm.

"In this case, like in all of our cases, we need time to investigate, so we need to be able to gather evidence that we aresatisfied,"Muir said Tuesday.

"So, that takes time to gather. Our investigations are often time-consuming and complex and this one is an example of that."

Muir said the matter is administrative rather than criminal in nature, meaning the firm and Smillie won't face jail time, but may face monetary penalties or even banishment from public markets should the commission succeed in proving its case.

Const. Gary O'Brien with the Nanaimo RCMP said the detachment's investigation into the company in 2019 didn't find enough evidence to lay criminal charges.

"All I can say is that the matter was investigated and there was insufficient evidence gathered by the primary investigator to pursue criminal matters, so they decided it would probably be best to go from a civil angle,'' O'Brien said Tuesday.

"That's the only information that I could provide at this point."

O'Brien said the file could be reopened should any victims or the securities commission reach out to investigators with new information.

Sergei Goshko, an Ontario-based software engineer, said he used the ezBtc platform for cryptocurrency trading until it stopped allowing him access to his funds before its website "disappeared completely."

Goshko filed a lawsuit in B.C. Supreme Court in 2021 through a numbered company, and he said he was out between $70,000 and $80,000.

His lawyers, though, weren't able to find Smillie and he was unaware the B.C. Securities Commission was taking action against ezBtc and its founder.

"I guess it's a good thing, so maybe there'll be some progress,'' Goshko said Tuesday. "Maybe they will finally find him.''

Smillie could not be reached for comment.

Here is the original post:

Securities Commission alleges fraud committed by B.C. crypto firm - CBC.ca

May 2, 2023 3:00 PM | 1 min read

Stacks's (CRYPTO: STX) price has increased 11.49% over the past 24 hours to $0.76. Over the past week, STX has experienced an uptick of over 3.0%, moving from $0.73 to its current price. As it stands right now, the coin's all-time high is $3.39.

The chart below compares the price movement and volatility for Stacks over the past 24 hours (left) to its price movement over the past week (right). The gray bands are Bollinger Bands, measuring the volatility for both the daily and weekly price movements. The wider the bands are, or the larger the gray area is at any given moment, the larger the volatility.

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The trading volume for the coin has fallen 9.0% over the past week which is opposite, directionally, with the overall circulating supply of the coin, which has increased 0.26%. This brings the circulating supply to 1.38 billion, which makes up an estimated 75.66% of its max supply of 1.82 billion. According to our data, the current market cap ranking for STX is #46 at $1.06 billion.

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Cryptocurrency Stacks's Price Increased More Than 11% Within 24 hours - Benzinga