Bitcoin is the first and foremost cryptocurrency that has risen to nearly $70,000 per coin since its inception. Like other crypto assets, for which it is the “leader of the market”, it is characterized by high volatility, which carries not only opportunities for profit, but also risks.
You can meet many approaches: some experts advise to open a crypto account, others may say that cryptocurrencies are a complete manipulation and a short-term project.
Earnings on the bitcoin course: basic approaches
Traditional approaches to making money on financial assets are divided into investment and speculative. The first suggests buying for a long period, the instruments are kept in the portfolio in the hope of significant growth.
Investing in bitcoin is a tricky strategy due to its high volatility.
How the price has changed:
- the price of the main cryptocurrency in 2021 rose from $20,000 to $69,000 apiece;
- by June 2022 collapsed by almost 70%;
- at the end of 2022 and even at the beginning of 2023 the price drops below $18,000.
And although analysts and crypto supporters claim that the first cryptocurrency will cost at least several hundred thousand dollars per coin due to the fact that the number of bitcoins mined is limited, only investors with large capital can wait out such periods of strong drawdowns.
Medium-term buying strategies are also difficult due to high and unpredictable volatility. On the one hand, bitcoin, which is now worth about $20,000, is still expensive for private investors with little capital, on the other hand, its price can collapse sharply and lead to losses.
Against this background, those who understand the prospects of this asset and are looking for a way to make money on the Bitcoin exchange rate should take a closer look at other approaches.
How to make money on the Bitcoin exchange rate: an alternative to investments
Having figured out how to make money on the bitcoin rate for investors with large capital, we will consider what private traders can use.
There are two approaches here – traditional active trading and arbitrage. The first allows you to earn on the bitcoin rate, using short-term price fluctuations. In this case, speculation takes place within the day, you can earn both on the rise and fall of the price.
Speculative strategies are based on technical or indicator analysis, or a combination of both. Intraday levels and trends on cryptocurrency charts work well. You can trade using leverage, be sure to limit the risks to a stop loss, which allows you to start with relatively low amounts.
What is cryptocurrency arbitrage? This is a profit on the difference in the market value of the same cryptocurrency at the same time on different exchanges. This method is suitable for those who are looking for how to make money on the difference in the bitcoin rate with minimal risk.
In arbitrage strategies, a cryptocurrency is bought on one site at a lower price and sold immediately on another, where its quote is higher. To analyze and monitor prices, their difference, special arbitrage screeners are used. Arbitrage strategies, although safe, require control over fees, as exchanges may charge fees for transactions and storage of bitcoins.
