How to get 50% return* under 24 hrs trading bitcoins.

If you have been following bitcoin prices recently you probably feel like it's a bubble, and I think you are right.

It's also interesting to note that some new markets have been opening up for the space cash, the most interesting one is South Korea.

For the last 2 weeks or so, there has been a difference in price between Bithumb and Korbit with the other exchanges of 25% to 50%. Which means if you are able to buy bitcoins on other exchanges, send it over and sell it for KRW, you will be able to make an instant 25% to 50% return on your money.

The question is why isn't there anyone making kimchi? Actually there are lots of people trying to do. I'm one of them. The purpose of this article is to outline how it is done for me and what is the true return after fees.

Operation: Kimchi

Get the ingredients

I live close to Toronto. For me to purchase bitcoins here, there are a few exchanges that I can use. I use QuadrigaCX and Kraken. Kraken has more liquidity than QuadrigaCX as QuadrigaCX caters mainly to the Canadian population.

The route for Canadian dollars to the exchange has many barriers. It used to be as simple as sending an e-mail transfer and waiting 1 - 2 business days. Bitcoin price has gone to the moon for the last few weeks, and since then the exchanges are getting a lot of traffic. New people getting in, veteran day traders, and people just interested to take a look. They have since close the e-mail transfer route. Now you can either do bank wire, bank draft, money order and the likes. All of which takes 3 to 5 business days when it's fast and 1 to 2 weeks when there are backlogs.

The other option is to buy in person. This route is for the more experienced and generally done with a lower amount. Most of these transactions are done through cash or cash deposits into the corresponding bank of the broker. There are some e-mail transfer or bill payment methods, but generally speaking, it's a leap of faith for the uninitiated to just give money to people who they've never met.

Say you are one those brave ones and decide to buy bitcoins for cash. You get someone on Localbitcoins. Their rating matters. You find out that you are buying between 4% to 7% and sometimes 10% over market rates. Looking at the difference between the Korean markets and markets here you see that there's a difference of 25%, so you make the purchase.

Once you get your bitcoins at 6% you now have to send it to the Korean exchange. Without being a Korean citizen, you can only deposit money but not withdrawal it.

Find a Partner

Your roommate in university, Dasol lives in Korea. You call her right before she goes to sleep because of the 13 hrs difference. She gets on the phone and has no idea what Bitcoin means. You send her to Bithumb and Korbit and then the other exchanges. She realizes what is going on and agrees to help. You offer her a base "leg work" fee and then 50% of the profits.

The markets here takes about 5 business days to verify who you are. Korea takes 2 hrs and a phone call.

Dasol sets herself up and gets verified. You send the bitcoins over, she sells them into KRW, and BAM you realize 25% instant profits. It's never been easier.

Now Dasol has to send the money back. Meanwhile the margin moves up to 50%...

The Recipe, AKA Capital Rules & Moving the Money

Here comes Western Union. You find out that there's a way to use Western Union to move money instantly for about 4%. You learn about the Korean capital control laws of 7k USD per day and 50k USD per year, anything above 20K USD to a foreign destination needs to be reported.

Dasol wakes up the next morning, and goes to the bank to send you 7k USD. Once she gets there, she fills up the form, tells some story about the money, pays $280USD, ans gets a MTCN number.

Now your cost is at 10%. 6% from buying your bitcoins and 4% from Western Union fees.

You take the MTCN number and walk into a payday loan place. If you are like me, you have probably never set foot in one of these. I always see their ads while driving. 20$ for $300 dollar payday loan, what a good deal! (On a side note, 3 out of 5 payday loans are issued for the sole purpose of paying for the last one. Talking about digging yourself into a hole!)

Cashing Out

Back to Operation Kimchi. You walk into the first payday loan place that you see and show them the tracking number to get the cash. What you soon find out is that they don't do amounts in cash for more than $2k CAD. If it's higher than $2k CAD, they pay you with a check. So you agree, and start thinking about how to explain yourself to your bank on cashing out $9.4k CAD for another round of Operation Kimchi.

You decide to worry about that later.

You agree to a check. The person goes to their computer and finds out that the Western Union system on their computer can only do $1k CAD tranches and 9 tranches in total. He can't cash you out, cash nor check.

You get back in the car and decide to google all and any Western Union places until you find out that Money Mart is like a bank for the unbanked. Instead of just showing up, you decide to get on the phone with them first to explain that you have 7k USD coming in from Korea. You ask them if they can cash you out.

It's Thursday, that's when most of the payday loan customers come in. The first center that you find will only have the cash ready in the afternoon. Since you already locked in a price with your bitcoin broker, you have to find a place to cash you out. Finally you find a Money Mart in a nicer part of the town that has enough funds.

You drive there, show them the number and fill out a form. They bring out the bill counter machine and puts in 100s and 50s. They also ask you why are you receiving this much money from from Korea. Instead of telling them about bitcoins you decide to say something else. A story to the effect of not having to explain about a currency that most people still believe is only used for money laundering and drugs.

Rinse and Repeat

If you are like me, I've never held more than a few hundred bucks in my hand. It's just like the movies for us normal folks.

You call up your broker, drive to his location and have him count the whole thing in the car. All of this for some of that space cash so you can do it again.

Final profits

*Overall, after the 50/50 split on the profit, you are looking at a return between 5% and 10% within 24 hours.

Don't forget to pay taxes on your gains.

Happy flipping.

Self Plug

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