Serenity: Cryptocurrency trading versus forex trading

Author: Forex Live | Category: Cryptocurrency

From Stanislav Vaneev, Founder of Serenity


Cryptocurrency trading has gained unprecedented popularity over the past year. This is mainly due to the huge profitability that the cryptocurrencies have demonstrated over the last few years. Back in January 2016 Bitcoin, for example, cost approximately $440, while in 2017 it was almost touching $20,000. The investment asset with a more than forty-six-fold increase will undoubtedly come to the attention of any trader who makes money in speculative markets.

Watching the abrupt rise of the entire crypto market in 2017, private traders, who trade in the currency and contract for difference, have gradually switched to cryptocurrency trading. Even though the market is almost unregulated today, private traders' capital is flowing to brokers, who were the first to respond to the overwhelming demand for cryptocurrency trading.

The crypto market has historically operated outside of the government regulatory field and the first to adapt to the demand were cryptocurrency exchanges followed by offshore brokers in the under-regulated regions.

Regulated brokers are left out of business, since offering cryptocurrency-based spot instruments is not governed by their regulators and the only thing that is currently available for them is bitcoin futures contracts traded on U.S. exchanges.

The key principles of cryptocurrency trading are very similar to those of trading in the traditional currency market, since they are based on the same standards as conventional currency trading. However, they have a number of their own dimensions and characteristics to be explored in this piece below.

Aspects of cryptocurrency trading

Cryptocurrency exchange rates differ from their actual value

Those traders, who are skilled in stock and Forex markets, often face difficulties when dealing with cryptocurrencies. The fact is that the cryptocurrency exchange rates at the exchange can deviate significantly from the values they actually have. Cryptocurrency trading is still unregulated by the laws in most countries, which presents a wide margin for abuses and employment of prohibited practices.

High volatility

The crypto market is different from the traditional Forex market in high volatility instruments. Cryptocurrencies experience a 20 percent to 30 percent exchange rate fluctuation during a day that is why leveraged trading, with either brokers or exchanges permitting opening positions that exceed traders' deposits, is much less frequent in the crypto market than in the Forex market.

Trading 24/7

Unlike currencies in the traditional Forex market, cryptocurrencies are traded non-stop. While the Forex market closes during weekends and holidays, which is also worth considering, crypto traders trade not only at nights, but also on weekends.

Low to no leverage

It is challenging to find exchanges or brokerages in the market which provide leveraged trading. Those offering leverage tend to impose a number of additional restrictions. Some exchanges do not permit the use of stop-loss orders, since they are not easily executed with rapid changes of quotes.

Certain brokerage firms only allow buying cryptocurrencies, while others require weekday trading only, with any position to be closed on Fridays, and do not permit trading during Saturdays and Sundays.

While you can find a broker offering access to a 1:100-1:200 leverage in the Forex market, the leverage that can be expected with cryptocurrency trading is 1:3-1:5, leverages rarely reach 1:10. In doing so, exchanges and brokerages limit the risks of traders' losses exceeding their deposited funds and resulting in their account balances going negative. In this event, negative balances are most likely to bring losses to the exchanges or brokers.

Restrictions on short sales

With leveraged cryptocurrency trading, few brokerages and exchanges still offer short sales for traders, having no cryptocurrencies, to be able to sell them and gain profits from exchange differences. This is an apparently normal practice in the Forex market, but why does it make a problem for the crypto market? And again, the reason is the great volatility of crypto instruments together with high risks.

Challenges to be solved by Serenity

A lot of challenges relating to cryptocurrency trading are intended to be solved by the Serenity project, which, in addition to being the first Escrow blockchain platform, is an exchange for trading both in the Forex and the cryptocurrency markets.

The Serenity exchange will enable investors and traders to trade in the traditional Forex market, buy and sell both stocks and cryptocurrencies using leverages and to short sell financial instruments whatsoever.

Serenity will be linked to dozens of cryptocurrency exchanges to ensure its reliability and continuous liquidity on the exchange order book. Crypto investors, as well as brokerage firms and liquidity providers will be able to open multi-cryptocurrency accounts on the exchange without having to convert currencies.

In addition to the exchange, the Serenity project includes a blockchain platform that protects traders against unlawful and fraudulent actions by brokerage firms as considered above.

The array of know-hows, software products and developments by Serenity equips us with the confidence to assert that the project will become the world's standard in financial instruments trading and the protection of market players.

ICО Serenity

Serenity is the first escrow broker-platform for financial markets that protects investors' funds from fraud and trading interferences by using smart contracts.  

  • The ICO will be held in one stage, from 25 January to 7 March.
  • The company plans to raise $19 million to develop the platform.
  • The opening price of a token is 0.0001 ETH.
  • Stock ticker SRNT.
  • SRNT token has been listed by the largest Russian exchange, Yobit. Talks with several more exchanges are currently underway.

The project has been supported by major brokers from the forex and binary option industries, including IQoption, Liteforex, NordFX, as well as Alexey Kutsenko (founder of Tools for Brokers), Yagub Rahimov (adviser of the ICO project nagaico.com and founder of AtoZForex), and many others.

Post written by Stanislav Vaneev, Founder of Serenity