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Forex and Cryptocurrencies

Forex

The foreign exchange market (Forex, FX, or currency market) is a global decentralised or over-the-counter (OTC) market for the trading of currencies. This market determines the foreign exchange rate. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the credit market.

The main participants in this market are the more significant international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, except weekends. Since currencies are always traded in pairs, the foreign exchange market does not set a currency's absolute value but rather determines its relative value by setting the market price of one currency if paid for with another. Ex: US$1 is worth X CAD, or CHF, or JPY, etc.

The foreign exchange market works through financial institutions and operates on several levels. Behind the scenes, banks turn to a smaller number of financial firms known as "dealers", who are involved in large quantities of foreign exchange trading. Most foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the "interbank market" (although a few insurance companies and other kinds of financial firms are involved). Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions.

Orius Capital invest in foreign exchange market because of the following characteristics:

  • Its huge trading volume, representing the largest asset class in the world leading to high liquidity.
  • Its geographical dispersion.
  • Its continuous operation.
  • The variety of factors that affect exchange rates.
  • The low margins of relative profit compared with other markets of fixed income.
  • The use of leverage to enhance profit and loss margins and concerning account size.

Moreover, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.

Cryptocurrency

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralised control as opposed to centralised digital currency and central banking systems.

The decentralised control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.

Bitcoin, first released as open-source software in 2009, is generally considered the first decentralised cryptocurrency. Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.

A cryptocurrency is a system that meets six conditions:

  • The system does not require a central authority; its state is maintained through distributed consensus.
  • The system keeps an overview of cryptocurrency units and their ownership.
  • The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  • Ownership of cryptocurrency units can be proved exclusively cryptographically.
  • The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current owners of these units.
  • If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.

The cryptocurrency at launch was only worth a few cents to a few dollars but has grown significantly in recent years and reached the highest mark in 2017 (BTC: $ 20,000; ETH almost $ 4,000 ... .) and market volume worth hundreds of billions of dollars.

Orius Capital recognises that this is a potential, high-profit market and especially this is the right time to invest in this market, most countries around the world gradually admit cryptocurrency as an asset.

Also, many countries have their laws were gradually issued to protect investors that will make this market safer, more transparent and of course attract much more investors to join to this emerging market.