How To Make Money From Bitcoin Volatility – 2024 Guide

For quite some time now, cryptocurrency is changing our economics, and we can say that it has already changed our financial system and even how we, as individuals, perceive money. Our whole perception since cryptos stepped in has been about that wonderous invention called digital money, and as such, many took their chance and invested when it was all still at the beginning, and it was the time when those who were not that familiar with this topic didn’t know what to expect. Rumors, myths, false accusations, all this is what every crypto faced in the last couple of years, and today, even though the vast majority knows what cryptocurrencies really are, how they work, and what is their core meaning, there are still skeptics who think of it as a hoax or some kind of Ponzi scheme.

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Is volatility bad or not?

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The main argument of those skeptics is mostly about its volatility. Namely, this argument is about how no one can predict what will happen next on the market, and therefore, it must be some kind of a hoax. On the other hand, everyone who has scratched the surface to learn more about the technology behind them is aware that price volatility is something to be expected from digital money. Their main source of power is in how many people are interested in investing in them. That whole system is quite obvious, and most cryptos are not dependent on any global event or crisis as they have their value. But, when there is a high demand, it is natural that their price will also go up. It is a simple yet fundamental economic principle that when supply exceeds demand, prices fall, and when demand exceeds supply, prices tend to rise.

Now, when we settled that, we can start talking more about how to use that volatility to our advantage and make the most out of it, especially in Bitcoin, as the crypto from which we can profit the most. There are several ways to achieve that, but we will focus on the most profitable ones, so let’s check them out.

Use the advantage of the arbitrage

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When it comes to Bitcoin and cryptocurrencies in general, it is good to know that these currencies are independent of regulations and controls, which is not the situation with fiat money. That is one of the reasons why BTC is so volatile and why its price can vary that fast, sometimes in a few hours. There is no need to be an experienced trader to use the advantage of arbitrage, and it is one of the easiest strategies for trading, so it is perfect even for beginners. It may sound complicated, but the truth is much different, and it is not necessary to spend hours researching and learning since all we need to do is buy the BTC once we decide that the price is low enough and to sell it for the higher price.

It is important to be patient, check different prices, and sell the BTC once it is above the market value. If you want to earn some money, it is crucial to look for a spread from 5 to 40%, and when you find the perfect offer, sell the amount of BTC you want and look for the next investment. Keep in mind that it is necessary to pay some fees for every transaction, so calculate it before you are sure that you are happy with a price. If you forget to calculate fees and other costs, you will end up with a small or no profit at all.

Try the most used strategy for trading

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Probably the most used strategy when it comes to crypto trading is buying and hold, and many beginners but also experts are deciding to use it. This strategy is not hard to learn, and all you have to do is buy the BTC, hold it, and sell when the price rises. If you want to make a profit, it is necessary to purchase the BTC for the lower price and keep it until the value increases. There are two types of this strategy, and one of them is the short term which does not require a long waiting, and the second one is the indefinitely buy and hold, which requires patience and long-term planning.

No matter which one you choose, the principle is the same, and you can use the crypto volatility as the advantage and make a profit out of that.
Be aware that it is necessary to be patient and cold-blooded when using this strategy because many inexperienced traders rush to sell all BTC once the price starts to decrease, which usually results in losing money. Patient traders wait for the price to start increasing again, and they are making a lot of profit out of their patience. This strategy is not hard to learn, but it requires a lot of self-control and dedication, so it is not a perfect choice for inexperienced and impatient traders.

Margin trading

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With this one, you need to be careful because if not, you can end up losing everything quite fast. It is perhaps the best option to start small if you are not that experienced, as the whole system is based on borrowing money and then investing. Since it is one of the riskiest ways to use BTC volatility to your advantage, it is also the one that pays the most, but once you borrow money, be aware that no matter what happens, you need to pay that money back, plus fees. That is why taking it slow is the best strategy, as you will test the market and see how things work.

Final Thoughts

Now, when you know what to expect and how to prepare and use BTC volatility to make money, the only remaining thing is to find a trustworthy platform to do so. That’s where web-based platforms such as BitcoinFortress steps in, as one of the most reputable platforms and the one with a high number of satisfied users. Patience and instinct are the best qualities you need when investing money, so invest, but invest smartly.