One can earn bitcoins by trading it with other currencies. How is this done? Simple, you buy bitcoins from a Bitcoin vendor or exchange example and sell it back to when the value of Bitcoin has increased, just as in forex trading. The most recommended exchange for this is Local Bitcoins. Why is this so? This is because Local Bitcoins provides a forum where different sellers and buyers meet. So you can decide on who offers a better exchange rate. Also it links you to buyers and sellers within your own locality. Follow the step-by-step guide on how to buy bitcoins from Local bitcoins.
Using US dollar as an example, when bitcoins are being traded centrally there are fluctuations in their dollar value. Hence a speculator will buy bitcoins when there is a drop in their dollar value and sell when there is a rise in dollar value. Below is a table roughly showing the price fluctuations from 2010 till date.
Timeline of the Bitcoin : USD value.
Date USD:1BTC Events
January 2009 was of no value Bitcoin was recently launched
May 2010 less than $0.01 First real-world transaction when two pizzas were bought in Florida for 10,000 BTC
July 2010 about $0.08 1st exponential rise following heightened awareness of bitcoins.
Feb 2011 – April 2011 $1 Bitcoin becomes equal to dollars
11 April 2013 $266 The value was growing by 5-10% daily.
June 2013 $100 Value drops due to increased spread of negative publicity
Nov 2013 $350-$1200 Value rises and hits the highest value since its launch
Feb 2014 $500-$750 Value falls following the shutdown of MT.Gox after its hack.
Feb 2014 $400 Continous drop in price following increased skepticism and rumours on the ban of bitcoins in China
Mar 2015 $200-$300 Prices continues falling through till early 2015
May–June 2016 $450 -$750 Large spike in value starting from $450 and reaching a maximum of $750.
October–November 2016 $680-$920 Supersonic rise as the value of Chinese Reminbi continus falling against the US dollars
January 2017 $1000 Value hits a $1000 on new years eve
March 2, 2017 $1250
A trader who had bought s a $1000 worth of bitcoins in June 2013 at $100 per bitcoin will realize about $10,000 in 2017 when his bitcoins are sold at the rate of $1000 per bitcoin.
Lucrative isn’t it? Well you should also bear in mind that the dollar value may also take a plunge causing severe losses.
In the light of a new development, this method of making money from bitcoin is rapidly becoming very popular. This is so because majority of forex trading platforms have started supporting the direct trading of bitcoins against fiat currencies such as US dollar and Euro. To see the list click here.