How to Sell Bitcoin
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How to Sell Bitcoin

2 years ago

To sell Bitcoin, you'll need to pick an exchange that you are comfortable with and supports the currencies that you need.

How to Sell Bitcoin

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Now that you’ve bought some Bitcoin, you’re also ready to sell it!

Below is a brief guide to how to turn Bitcoin (BTC) to cash using some of the most popular methods, including through an exchange for either fiat currency or another cryptocurrency.

How to Cash Out Bitcoin

If you’re not interested in HODLing or having trouble figuring out how to spend your Bitcoin, you can always just cash out your BTC for fiat.

When cashing out Bitcoin, you are most likely going to be subject to some transaction, network or withdrawal fees. Unfortunately, there is no magical Bitcoin bank that can cash you out without charging any commission or additional fees. However, if you do your research well enough, it’s possible to find ways to reduce these additional charges.

You can use a number of platforms to cash out your BTC including Coinbase, Paypal, CashApp, LocalBitcoins and so on. To sell Bitcoin for cash, you’re going to need BTC in your crypto wallet and a bank account to transfer the BTC into. First, you’re going to have to accept the market price conversion rate to your local fiat currency. Then, once you’ve accepted the conversion, you’ll have to pay some deposit/withdrawal fees to initiate the bank transfer. Sometimes there will be a short holding period before you are allowed to complete the withdrawal. Then, once the withdrawal is ready, you’ll need to be a bit patient. Like most other bank transfers it may take up to 1-5 business days for the cash to reach your bank account.

Finally, depending on how long you’ve kept your BTC and your income status, you may also have to pay some income tax come tax season. For large BTC cash outs, you can be subject to capital gains taxes. Another thing to consider when cashing out your BTC is that some exchanges and P2P platforms will have withdrawal limits. However, these limits usually only apply if you are cashing out a massive amount of BTC.

If you don’t want to use an exchange or brokerage, you can also cash out via a Bitcoin ATM. There are thousands of Bitcoin ATM locations around the globe. However, Bitcoin ATMs will also charge some fees, so make sure you accept the terms of the transaction before you cash out.

Selling Bitcoin on Cryptocurrency Exchanges

A crypto exchange can act as an intermediary between sellers and buyers of cryptocurrency. To sell Bitcoin for cash, you will first need to set up an exchange account and deposit your BTC in the hot Bitcoin wallet that is provided by the exchange.
Note that most reputable BTC exchanges require their users to provide personal information before they can sell cryptocurrency, in order to comply with KYC and AML rules.
Exchanges often support a wide range of fiat currencies, such as the US dollar, GBP or euro, as well as cryptocurrencies like Ethereum (ETH), Dash, Bitcoin Cash (BCH), Litecoin (LTC) and XRP.
The key advantage of using a cryptocurrency exchange to sell Bitcoin for cash is that well-known exchanges have deep liquidity and provide quick access to a large pool of potential buyers.

They are also relatively easy to use: you will need to place a sell offer, defining how much cryptocurrency you wish to sell and set your asking price per unit. The exchange then automatically processes the transaction once your offer is matched.

If you have sold your BTC in exchange for fiat currency, you will be able to withdraw your funds to a linked bank account via bank transfer (e.g. SEPA, SWIFT or other wire transfer) or to a Visa or Mastercard.

Some exchanges charge high transaction fees for withdrawals, so it’s worth comparing the rates charged by the likes of Coinbase, Kraken or Bitstamp to find the optimal terms.

Selling Bitcoin Through Peer-to-Peer, Direct Trading and DEXs

Peer-to-peer (p2p), direct trading sites and decentralized exchanges (DEX) offer an alternative to centralized cryptocurrency exchanges.

They enable buyers to use a range of payment methods (debit card, PayPal, credit card, Western Union or bank transfer) to purchase cryptocurrency from various sellers without having a central intermediary involved.

P2P sites and DEX usually offer escrow services for users, so that transacting parties’ funds and assets remain protected until the terms of the purchase or sale have been met.

For direct trading, BTC holders need to register as sellers (which may involve verification of personal information) with the site, but beyond this the site typically provides a minimal service and simply serves a way for users to find and directly interact with one another.

Perhaps the best-known veteran P2P site is LocalBitcoins, although the platform has recently tightened their identity verification procedures, meaning it is no longer the place to go if you’re keen to preserve your anonymity as a Bitcoin seller.

Selling Bitcoin With a Bitcoin ATM

A Bitcoin ATM is an electronic machine — physically installed in a public location — that enables the exchange of cash for cryptocurrency. Selling Bitcoin for cash using a Bitcoin ATM requires you to send your BTC to a wallet address given by the machine through a QR code.

Once the sale is completed, you will either receive your cash on the spot or have to wait for a redeem code while the BTC transaction is confirmed on the blockchain.

Many Bitcoin ATMs require sellers to show an official ID. The fiat currency you will get in exchange for your BTC will be calculated using the current market rate for Bitcoin (BTC), and there is usually an added commission charged by the ATM operator (on average, 8.4%).

Bitcoin to Cash in Real Life

The riskiest — but likely most anonymous — way to turn Bitcoin to cash is to do so in person. This will involve negotiations about the asking price and terms, and both parties must take precautions to ensure their personal safety and the integrity of their funds and assets. LocalBitcoin used to offer an option for in-person cash trades, but removed it in June 2019 as a concession to the current crypto regulatory climate.

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