How to make money with Bitcoin. Yes, believe it or not, it is possible to make a guaranteed, risk-free profit with Bitcoin, today.
This is an incredibly bold statement but a true one nevertheless.
There is a catch though, you need 2 things. Firstly, it involves skill and secondly, it involves hard work. In this article we will give you as much information as we can so that you can develop your trading skills, the work ethic is what you need to bring to the table. The faster you do the work, the quicker the profits will flow and it will increase as you develop your skill.
So what is this guaranteed profit strategy?
How to make money with Bitcoin
Arbitrage is the process of a simultaneous buy and sell of the same asset in different markets thus “locking-in” a guaranteed profit.
Let’s give a real-world example: Say you are a fruit trader and you want to make an arbitrage profit. You have a supermarket in your town as a customer and a fruit grower 100 miles away that can provide the fruit you need. How the arbitrage is created is by calling the farmer, quoting your price that you will pay on the farm and at the same time you will also agree on a selling price with the supermarket. Your price to the supermarket will include the cost of transportation of the fruit as well as your markup or profit. In this way, a guaranteed profit is made by the fruit trader with zero price risk as the prices are agreed in advance. This is an example of a “location arbitrage”. In this case fruit at the supermarket location is more expensive because of the effort required to transport the fruit from location farm to location supermarket.
Similar price differentials exist in the cryptocurrency / Bitcoin markets and we will explore how the savvy trader can turn these opportunities into profit. We will use Bitcoin as our prime example.
Currently, Bitcoin is traded on more than 5 000 exchanges worldwide and sometimes the prices on these exchanges can differ widely. At first glance then it seems that it would be easy to just sell on one exchange while buying on another but in reality, it is not as easy as just flicking a mouse. There are practical implications that are sometimes the reason for the price differential. It could be that an exchange is only open to local residents in a certain country in which Bitcoin trades at a premium which would make the arbitrage impossible or impractical.
However, there are some very lucrative opportunities.
Let’s look at some practical arbitrage ideas on how to make money with Bitcoin.
Enter the wonderful world of Localbitcoins.com. Localbitcoins is a peer2peer trading site where traders of Bitcoin can post transactions and trade with other Bitcoin buyers and/or sellers. The site is established and has a sterling reputation that was built over the last decade.
One of the ways traders take advantage of price differentials is the “spread” or price difference between what buyers want to pay and sellers are willing to accept. Sometimes a seller is in need of cash flow and if you are a buyer that can provide a fast payment method you can buy Bitcoin at a discount. Or conversely someone is desperate to buy and you can sell to them at a premium.
One of the things that can give you an advantage on Localbitcoins is when you have the ability to use a variety of payment methods. If you can do immediate national bank transfers, this is something that will give you a major advantage as people will give a discount for immediate payment. Similarly, if you have the ability to trade in different currencies and in different locations, you can bank profits on a daily basis.
The best thing to do is to sign up for a free account at Localbitcoins.com and start your search for opportunity to make money with Bitcoin.
Exchange to Exchange Arbitrage
In this case, you would have accounts with several exchanges and you would scan these for arbitrage opportunities. You could, for example, have an account with Kraken where you buy Bitcoins and sell them on LocalBitcoins or the converse.
As you can see this can become a major administration exercise and you would need to keep good records of your buys and sells to avoid trading mistakes that could be costly.
So how to start to make money with Bitcoin?
For a new trader, we would suggest starting with an account at LocalBitcoins, like we said it’s free [Click here to sign up] to open.
We would start small and do a few trades on LocalBitcoins before opening one or 2 accounts with other exchanges and then progress from there.
Once you have a system that works for you, you can then also expand into trading other cryptocurrencies, the possibilities are endless.
The biggest challenge in all of this is to keep track of it all. Fortunately, commercial solutions for this problem is popping up and one of the latest products is a software package called Cryptosuite which we recommend that you try. It has a money-back guarantee and is by a trusted provider of software, so you could try it without any risk.
As you can see, the opportunity in this type of trading is enormous, the possibilities endless and will expand as more capital flow into these markets.
Also a fair warning, profits can be made but it is not easy and it is very easy to lose money with trading errors but if you start with small steps and build your skills and systems over time, this can be one of the most lucrative endeavours you will ever undertake.
Happy Trading! Do you think you can make money with Bitcoin?
Get your copy of What is Bitcoin
This e-book on Amazon explains what Bitcoin is, it explains that Bitcoin (BTC) is a virtual currency, digital, not physical, and independent of banks. Useful links and resources for the newbie and advanced Bitcoiner or cryptocurrency enthusiast.
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