How to earn on Bitcoin (BTC)? While America sleeps, the demons of profit are waking up…


Bespoke produces great stock stats and just released one that I’d like to comment on hot on the blog due to some interesting tidbits. This is Bitcoin, which has caught our attention more since the appearance of CFDs on it in the Bossafx offer. But also because its changes and other cryptocurrencies are becoming increasingly important for changes in other markets, for which I am preparing a separate entry.

Is it time? Are we on top? The market is in an extremely interesting place – inflation, tapering, epidemic… Whether we meet remotely or at a standstill, we want to present our perspective and view of reality through the prism of psychology, fundamental analysis and technical analysis. We invite you to a series of 4 conferences on the pandemic.

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As you know, Bitcoin is traded 24/7, so its changes on the chart are not interrupted by gaps, as is the case with other instruments. However, it is impossible to constantly monitor its quotations, especially at night. In this arrangement, any anomaly that will help in a rational way to limit the time spent before trading for all traders (and perhaps also for long-term players) can help.

Tailored namely, he drew attention to a certain anomaly that also applies to traditional stock markets, namely indices and their derivatives, especially ETFs, and which can be replicated on Bitcoin. Well, statistics show that changes in US stock prices, tracked by indices, are significantly higher and bring more substantial profits during non-regular trading hours (i.e. outside of 9:30 a.m. to 4:00 p.m. New York time). This anomaly is described quite extensively even in scientific works, and I myself have devoted about ten entries with calculations in the past to their explanation, they are found in this->cycle”Overnight gaps in indexes“.

In detail, it looks like this:

Strategy one: buy bitcoin at 4 p.m. when US stock markets close and sell it at 9:30 a.m. as stock markets open for trading the next trading day. In a nutshell, we only keep bitcoin overnight/weekends.

Strategy 2: Buy Bitcoin at 9:30 a.m. when US stock markets open and sell it back at 4:00 p.m. when stock markets close on the same day. In a nutshell, we only hold Bitcoin during the regular session.

Bespoke has calculated the cumulative hypothetical gains of these strategies from January 1, 2020 and presented them in this chart:

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The first strategy, buy only overnight, is illustrated by light blue curve. The theoretical profit for this period was 259.1% in total. The second strategy, buy per session only, is illustrated by navy blue curve. The theoretical profit for this period amounts to 3.6%. The difference is therefore colossal. However, I do not present it here with the aim of encouraging investment in this direction. Obtaining these results can be difficult, not only because these distributions may change in the future, but also because deviations and slippage costs must also be taken into account.

My goal in this presentation is rather to indicate some practical advice on this phenomenon and the market itself:

1. In the cryptocurrency markets there are also anomaliesthe discovery of which allows you to create systematic and objectively organized strategies.

2. These types of abnormalities can make you no need to sit before the estimate 24h, in this case it was enough to check it twice a day.

3. This type of strategy as shown above huge landslides capital despite a good final result. But in return you can on it win even in bear marketlike now.

4. Changes in Bitcoin rates, and probably other currencies as well, are significantly lower during local exchange working hours (i.e. 3:30 p.m. to 10:00 p.m.). For some it’s an advantage, for others it’s a disadvantage.which makes it easier to speculate on this market outside these hours.

5. Cryptocurrency markets are starting to overlap with traditional markets, although experts don’t yet know the reasons for these correlations, even if the one above works. One possible explanation is that traders regularly trade stocks and after the session and on weekends, they switch to cryptocurrencies, increasing liquidity and volatility.

6. Other explanations for this anomaly: Asians are a large part of the players in this market, and they play with considerable leverage, which boosts volatility at night. Briefly: what Asia or Europe will gain on bitcoin, the Americans pass on next. And the time between sessions is longer than the session itself, so there is more information that needs to be refreshed, sometimes over the weekend. It is worth remembering that.

7. You can search for yourself additional filters for this policyby creating your own solutions. The possibilities are limitless. I will be happy to do it myself in the future on the blog, when I have enough data

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The opinions, assumptions and predictions expressed in the material belong to the author of the publication and should not represent the views of DM BOŚ SA The information and data contained in this material are provided for informational and educational purposes only and cannot form the basis for making an investment decision. They should not be considered a recommendation to invest in any financial instrument or any form of investment advice. DM BOŚ SA does not guarantee the accuracy, timeliness and completeness of this information. It is recommended that you independently conduct an independent review of the information contained herein. Investing in financial instruments involves risks.

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