Sorry if this sounds like a basic question, but I struggle to see how Bit Coin works as an investment because, unlike standard currency there is no way get interested on stored bit coins. For example, say you have $10,000 in a set period of (depending on what your banks interest rate is) you could see your money become 11K, 15K or even double. Now lets say (hypothetically of course) one has 100 bit coins. Its unlikely that they will become 101 in the coming future right?? So how does one generate any form of passive income?

  • Bitcoin itself for sure doesn't multiply without any action. And as such bitcoin doesn't raise from 100 to 101. There is no interest rate or similiar on stored bitcoins. But the value of bitcoins compared to any currency (the Euro, Pound or Dollar) might change - aka go up or down. So in this sense it looks like an FX trading, where the difference of values is relevant. There is no such thing as free beer, but looking at the history of crypto currencies, there was a lot to gain when having invested in early times. Today you have to have already a good understanding of the crypto market. Jan 8 '18 at 8:05

If you buy 100 bitcoins for $10,000 ($100 per coin), indeed you will always have 100 coins, you will never end up with 101. But if the price increases to $15,000 for your 100 bitcoins, you could sell 33.333 of them for $5,000 fiat profit, and still you would have $10,000 worth of BTC just like you bought at the start - a profit of $5,000.

You can increase the number of bitcoins for free if the price then drops after you sold some, lets say the price goes back down to $100 per coin after you sold the 33.333 coins ($5,000 at the time of sale), then you could purchase back 50 coins at the new price, leaving you with a total of 116.667 BTC

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