Trading using foreign currencies

I have a client who trades cryptocurrencies, sometimes using exchanges in other countries. He might do something like exchange USD for CNY, use the CNY to buy bitcoins, and then sell the bitcoins for USD. I can't get a straight answer on how to deal with fluctuations in value during the time that he holds the foreign currency. Is it always ordinary income/loss? I also read that since the foreign currency is being used in the process of investing, it would be capital gains/loss, so I'm not sure.