In order to understand how to make money with cryptocurrencies it is vital to understand the concept of supply and demand - the core of economics and of market economies.

Demand: How badly do buyers want a specific coin

Supply: How many coins are available in the market

Equilibrium: A point where market demand and supply cross - and price becomes stable

To give you an example let’s look at Bitcoin in 2010 - The total supply was the same as today but the amount of people that were willing to buy it was drastically less.

If you asked the average person “do you know about Bitcoin?” or more specifically “do you want to buy Bitcoin?” - they most probably said no.

Consequently the supply and demand curve would of looked very different from how it looks now.

Today the total supply is the same as it was in 2010 - however the amount of people that are willing to buy it is exceptionally higher.

Now if you ask the average person “do you know about Bitcoin?” or more specifically “do you want to buy any Bitcoin?” - they will most probably know about it and possibly even own it.

Unlike money you can’t simply increase the supply by printing more when necessary - therefore a higher demand makes it harder for people to own one.

If more people want a specific coin but there is not enough for everyone to purchase, the price will automatically increase - as people are willing to pay more for it. (kind of like bidding on an item on Ebay)

On the other hand if demand for a coin decreases and there are more sellers than buyers the price will decrease as well - as people will want to pay less and less for each coin.

In short what allows you to make money is to buy a coin when nobody wants it and selling it in the future when there is more demand at a higher price than what you purchased it for.

Buy low sell high

The secret to making good investments is to make great deals on the buy side, thus the identification and purchase of undervalued coins before they become popular - as that will allow you to buy high quality coins at a very good price due to the low demand.

It is absolutely vital that you do lots of research - you are not going to find the next undervalued coin in five minutes. So get ready to spend the next couple of days going through hundreds of potential coins!

If you have no idea on how to research new potential coins - then start with looking at this guide I wrote

Once you have identified your potential investment - do not buy it straight away! Begin to study its chart and wait for the best possible price and place an order!

Now that you have purchased and safely stored your coin - forget about it and don't go and check it’s value every two minutes.

Leave there for days, weeks, months and maybe even years. If you truly believe in its project one day it might get the attention it deserves over the news, social media and blogs.

When it does, traders and investors will begin to look at it and potentially buying it - and consequently increasing its demand and price

At this point don’t let emotions and greed overrule you - and sell your high demanded coins for a profit