Getting involved in the Bitcoin world can make for a very lucrative business. For most people, buying Bitcoin remains a key problem, and they will often rely on friends or family to help them out. This allows for some passive income by buying and selling Bitcoin. However, some people are earning as much as 20% markup by using exchanges and LocalBitcoins to automate most of the business.
Making Money With Buying and Selling Bitcoin
First of all, enthusiasts need to keep in mind buying and selling cryptocurrency on a frequent basis is not without risks. In most US states, and some countries, this makes the person a money transmitter, which may require a specific business license. Without that license, law enforcement agents may come knocking at the door at some point.
That being said, there is good money to be made when buying and selling Bitcoin. Most people would think of daytrading to do so, but there is no reason to “limit” one’s market reach. Using peer-to-peer platforms such as LocalBitcoins can make a very big difference for some people.
One Reddit user pointed out how he is making as much as 20% profit on some Bitcoin trades. Buying cryptocurrency off exchanges at market prices, and reselling them on LocalBitcoins at a premium, is not a new business model by any means. There is a good reason why LocalBitcoins is subject to premium prices, as it removes the friction of dealing with exchanges.
Some people may be wondering why people would pay higher Bitcoin prices to obtain cryptocurrency. There are various possible reasons, ranging from not having to deal with exchanges in the first place, to remaining somewhat anonymous. Not everyone wants to go through a thorough verification procedure, or deal with a delay of several days between buying and receiving Bitcoin.
At the same time, platforms such as LocalBitcoins are prone to various scamming tactics. A lot of users will attempt to pay with PayPal, which is subject to high chargeback rates. Since sellers can set their own prices for Bitcoin, there is some good money to be made.
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