Flip Bitcoin for Easy Profit πŸ’° LocalBitcoins Tutorial

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This tutorial takes advantage of a simple profit opportunity on LocalBitcoins; a person-to-person Bitcoin trading website.

This is not a buy and hold strategy. You will essentially be acting as a Bitcoin broker; buying Bitcoin under market rate, and selling it over market rate multiple times over.

There is a risk that Bitcoin might goto Β£1 at any point, bare that in mind. But aside from that, the profit margin tends to counter out any market moves. The trades pop-up pretty frequently.

Requirements

  1. A LocalBitcoins account; if you sign-up as my referral(click the link), I’m happy to help you out.
  2. Starting capital. You need 0.4BTC. You’ve got the money, it’s not expensive, but its going to turn you into a fatcat. You can check the current Bitcoin price on Preev. Just type in 0.4 in the BTC box.
  3. A bank account. Both are equally important, as you’ll come to find out later.
  4. ID to verify who you are. No verification, no sales, no bitcoin, no profits.

Assumptions

This tutorial assumes you have some basic knowledge about:

  • Bitcoin
  • Trading

If you’re unsure about Bitcoin then this tutorial probably isn’t for you.

There’s no harm in trying anyway, we’re not recoding Bitcoin or do anything super-techy. Once you make your first trade you should feel pretty comfortable with the process.

Sign-up

Go to LocalBitcoins & Register

The site is very simple to use, and has a nice minimalistic interface that cuts the shit, and gets you trading ASAP.

So goto LocalBitcoins, sign-up and fill out your details.

localbitcoins register

Verify your ID

Whether you’re buying or selling, on both ends, you need to confirm your identity. This process is for the safety of everyone involved in the trade.

localbitcoins verification of identity

If you don’t verify your ID then no-one will trade with you. And you shouldn’t trade with anyone that’s unverified either. Common sense, really.

Build some quick feedback

Easiest way to do this is do a number of small trades; buy Bitcoin from multiple people. Get to at least 10 feedback. Otherwise people will avoid you. Hit the Buy bitcoins tab.

There’s a number of people on the site, at different prices with different payment methods. You want to trade with National Bank transfer.

Open a trade offer with someone, and type in the minimum limit into the input box.

This process will get you accustomed to how the trades work, and build your confidence in the security of site.

Buy some Bitcoin under market rate

Once you’ve built a little feedback, it’s time to post a trade.

Sell your Bitcoin over market rate

Profit

Conclusion

20 COMMENTS

  1. Hi! I’m a new seller on LocalBitcoins with only 0.4btc to my name, fuelled with inspiration from the Wall Street movies, but lacking in knowledge and understanding of basic trading. Hence, I was wondering if maybe you could help explain some stuff like I’m five?

    1. Aren’t my chances of getting sales pretty slim as buyers usually only buy from the top 6 listed at the front page?
    2. Similar to Shawn Donnelly’s question, why would buyers buy from me when they can buy cheaper from a more established seller?
    3. What if buyers want to buy more than I have in my wallet?
    4. If I announce a sale, there’s a chance nobody’s around to buy right? And that I could end up waiting days, even weeks for a single sale?
    5. Is this just a matter of buying at one price and selling at another, or does it involve price charts, technical analysis trade indicators, historical data and all that, and if so in what way?
    6. I reckon buying cheaper from another exchange is out of the question, due to all the fees, and since I don’t live in the US or China? Most if not all buyers in my country (Norway) use LocalBitcoins exclusively.

    That’s all — cheers and thanks a lot for this article!

  2. I already have bitcoins so I didn’t buy them at a specific price, I was paid in BTC. So when I go to make my first sale, since advertising with 0 trades is probably out of the question how would I find a buyer that will purchase a small amount (amount you listed) at higher than market price? Current BTC to USD is $776 right now, I believe. So I have to find a buyer offering to buy at $776+…so roughly like $800? Sorry for the noobness of my question, but I’m just a little confused. Thanks so much for the article and taking the time to reply to this, if you do.

    • This is a really good question and I’m pleased youve asked.

      The money in this method lies solely in posting trades.

      When you post a trade you can buy bitcoin at a lower bound and sell them at the upper bound of where the current Buy/Sell rates are.

      You’ll notice that it’s more expensive to buy in LocalBitcoins than it is to sell, when you don’t post a trade.

      When you post a trade, you’re the one that is making the profits.

      If you’ve got any more questions drop a comment.

      • You’ll notice that it’s more expensive to buy in LocalBitcoins than it is to sell, when you don’t post a trade.

        You mean we get some sorta discount from other sellers when we ourselves become sellers?

  3. Hello Josh, I’ve been looking for an article like yours for some time now.
    I do have a question.

    How is it possible to transfer bitcoin so fast when dealing with bank transfers.

    Example.
    If someone sends me money to buy it takes almost 3 days to get the payment.
    So fast bitcoin release is out of the question, or do I have to ask my bank when a payment is been done or on the way?

    Feedback is appreciated!

    Regards

    Mr. Nighthunter

  4. Your article got me into trying this method, with the exception that my banking is in the usa. So I’ve been buying through coinbase, selling on lbtc for paypal money, then sending their paypal payment back to my bank. I only work with verified and trusted traders but im still paranoid about having a paypal chargeback, especially since most of my trades were filed under goods and services.
    I’m also trying to figure out whether what I’m doing is operating an exchange, and therefore illegal. I’m aware in my home state one needs to pay a fee and register to become a money transmitter. However Im not sure what kind of profit I’d need to see before worrying about that.
    Any feedback or suggestion is appreciated.

    • I’m pleased that my article got you to try the method out!

      What I’d advise is you buy larger amounts via Bank transfer on LBTC then sell in smaller amounts with bank transfer again.

      It’s best you get to grips with it before diving in to paypal too as you need to be able to prevent charge-backs, which comes with experience!

      If your state has laws on this then you may have to go through a legal route, but unfortunately I can’t advise you on this.

  5. Visited truemiller.com for the first time and really inspired from the knowledge it has.
    I would like to know if the website owner write this content or manage someway to do this. Thanks in advance.

  6. HEY JOSH. YOU ARE AN INSPIRATION. I JUST VERIFIED MY LOCALBITCOINS.COM ACCOUNT AND AM LOOKING INTO TRADING BITCOIN ON A DAILY BASIS. I LIVE IN CANADA, IS IT STILL BEST TO TAKE THE BANK TRANSFER ROUTE RATHER THAN PAYPAL? AND ALSO, I’M STARTING OFF WITH 0.4 BTC AS YOU SAID. HOW DO I GET IN FOR THIS PRICE? IT SEEMS MOST PEOPLE ARE SELLING AT MARKET PRICE.

  7. Hi Josh, just reading the article and seems to be very good this kinda of stuff, i was justing thinking about the end part, after you send the invoice to the buyer and receive the money in paypal, after that i have to transfer the money to bank account or should i buy more bitcoins directly with paypal?

  8. I’m really glad that you’ve asked this question. There’s one simple answer to this. The prices always fluctuate. Sometimes you’ll have more competition, sometimes less. The 50% is a figurative example as I explain in the article. But you might find your self flipping for anywhere between 5% to 50%. In some cases you might flip for more! What you must understand is that despite whether or not you do a flip for 5% or 50%, it’s still profit that you made in a second. Profit you can reflip, and reflip, and reflip. The concept is what I’d called “Accelerated Compounding”. You accrue a percentage every time.

  9. Hi Josh πŸ™‚
    Great article. Must say I’m pretty curious about this. Never heard of flipping bitcoins like this before, and for a 50% profit it sounds lucrative.
    How do you know you are gonna get a 50% profit each time? I can see people are selling and buying bitcoins at different rates all the time, so how do I make sure I get the right profit? Do you have a minimum/maximum rate you buy/sell for?
    Thanks again!
    Anders