Chapter 9
Dealing with the Dollar and Other Fiat Currencies
IN THIS CHAPTER
Introducing the U.S. dollar as the world’s reserve currency
Understanding major world currencies
Exploring the forex market versus the cryptocurrency market
Currency trading, also known as the foreign exchange market (forex), is the art of predicting the future value of fiat currencies against one another. Technically, a fiat currency is a legal tender that your local government supports through the central bank. The advent of cryptocurrencies has worried some fiat currency issuers (that is, central banks). Some believe that the cryptocurrencies may replace fiat currencies in the future. But for now, one of the ways to get your hands on cryptocurrencies is to exchange your fiat currencies for them. That’s why understanding the basic movements in the world’s fiat currencies may come in handy in your cryptocurrency investing endeavors.
This chapter looks at the U.S. dollar (USD) as the world’s reserve currency along with other major currencies and their relationships with the cryptocurrency market. (Trading cryptocurrencies versus fiat currencies is introduced in Chapter 5 of this minibook.)
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