Can you make money by trading Bitcoin? My answer is a resounding yes, that you can make a lot of money by trading Bitcoins. This is because the price of Bitcoins is highly volatile because if the price falls, then it can peak again, in just a matter of a few hours and there you’ll have made your money. Bitcoin is a form of a modern currency that exists virtually. It’s a relatively new currency, that was released in the year 2009. Bitcoin is slowly gaining traction as a currency and has now been adopted by some businesses, which have allowed their customers to pay for goods and services through Bitcoins.
Some companies, businesses and individuals have also adopted an option of paying their employees through Bitcoins. This reveals that there is indeed a demand for Bitcoins and that you can make money trading Bitcoins. For you to understand better how to make money through the trading of Bitcoins, it’s important to first drive through history and understand how currency works, what it’s intended to solve and what need drives people to invent a currency. Before Bitcoins were introduced people used other forms of currency to trade and make money.
It’s said that money begets money, therefore, people would use commodities as currency, this is referred to as commodity trading. If person X needed a goat and had Sorghum, they had to find person Y who has a goat and wants the sorghum in exchange. However, there existed a challenge in finding someone who was a perfect match to trade with. Fiat money was then invented and it simplified trading, and as a form of currency continues to be the most widely used medium of trading in the world today.
The Fiat currency is used to determine the value of commodities, where a person can exchange value for the currency. Then they can use the currency issued at their own predisposition. As mentioned, currency in its various forms has been traded since time immemorial. Today, people make money by trading Fiat currency, through foreign exchanges and investments. In a world that is continually looking for solutions, modern advancements in technology, have caused a disruption even in the world of money.
This has led to the invention of Bitcoins, as a form of currency. By understanding this, you can see clearly that you can make money by trading Bitcoin. Additionally, any person who has traded other forms of currencies and made money can be able to also make money from trading Bitcoins. Businesses can embrace the use of Bitcoins as a medium of exchange. This is where a business incorporates a system, where customers can pay for the goods and services offered, using Bitcoins. It’s important to note that this is beneficial as it makes the Bitcoins valuable, as they can be used to acquire value.
The business also acquires some Bitcoins that it can sell later for liquidity. Notably, businesses can earn even more money by selling the Bitcoins at a higher price than they were worth previously when acquiring them. This way, the business gets its money from trading Bitcoins. Instead of you using fiat currency to hoard on to money, Bitcoins can be used to store money electronically as a way of saving. Time value of money, states that a coin today is worth more than the same coin tomorrow. This is because, with time, the prices of commodities keep raising.
Therefore, the amount of money needed to buy value today will be higher tomorrow to acquire the same goods and services. Individuals and businesses can, therefore, convert their fiat currency into Bitcoins. In case, of a need to liquidate the Bitcoins for cash at a future date, they can be sold at the prevailing market price. The market price could be higher than the price that they were initially acquired at. This is proof that you can indeed make money by trading Bitcoins.
Investors are known to invest in currencies and to make money from the fluctuations in the exchange rates, which works in the same way for Bitcoin trading. An investor can buy Bitcoin, then exchange them for a higher price in a matter of hours because the price of a Bitcoin is highly volatile. The price can rise or decline in just a matter of hours. This proves that Bitcoin trading can indeed be profitable in just a matter of hours. The market for Bitcoins is not yet regulated by any authorities at the moment.
Therefore, individuals cannot be used to control that virtual marketplace and Governments cannot earn levies through this market. The Bitcoin market exists only to serve the needs of the buyer, seller and the miners of the Bitcoin. This means that the profits that they make from Bitcoin trading are not deducted. Individuals and businesses can, therefore, maximize their money on the platform, and you can indeed make money by trading Bitcoin. The blockchain technology, is the electronic ledger where the transactions carried out through Bitcoins are recorded.
Blockchain has no intermediaries or agents to control how you trade on the platform. This means that there are no agent fees or commissions needing to be paid out. These costs that eat into profits are therefore eliminated and you can make money by trading Bitcoins. It Is worth noting that there are no banks that are involved when exchanging Bitcoins. This means that the bank fees are eliminated and an investor in Bitcoins can earn their full money from the investment. Another way to make money by trading Bitcoins is through earning interest income through saving Bitcoins. There are companies that operate a crypto interest account, where you can save your Bitcoins.
Through such an account, an investor can earn interest for saving Bitcoins in the account. The interest can compound and this makes the investment very profitable. Mining of Bitcoins is among the ways in which you can earn money. This is where the miner, uses the software installed into their computer to solve complex mathematical problems and the miner or the miners are then rewarded with Bitcoins. A miner can trade their services for Bitcoins which they can exchange for cash. Trading in Bitcoins has huge monetary gains, as this currency has been embraced.