There are many options that allow you to cash out your Bitcoins, but the process is not as simple as buying them.
In today’s guide, we will be explaining how to sell Bitcoin and looking into the various methods that allow you to convert your BTC into fiat or another crypto.
How to Sell Bitcoin Through an Exchange
As you want to sell BTC, we already assume that you have a Bitcoin wallet in which your funds are stored.
We are sure you know that an exchange is a platform which holds the seller’s and buyer’s funds and mediates the transaction for them.
Select an Exchange
There are many exchanges out there, but also some criteria that you will have to look for before creating an account:
- First, the exchange must have Bitcoin paired with the currency you are interested in converting. Some only have USD withdrawals, other Euros, and most top exchanges have limited crypto pairs;
- Check if the withdrawal fees are convenient for you. Some withdrawal methods are more convenient than others, depending on your region, for example, SEPA for EU-based users. There are also plenty of Korean exchanges that support withdrawals in the Korean won fiat currency. Card fees are more expansive than bank fees, but the processing times are shorter;
- Check if the exchange’s services are available in your country;
- Verify if there are any limits to the amount of BTC you can deposit. These limits are enforced by the platform to encourage customers to deposit more frequently, and they can be increased over time.
Exchanges, such as Kraken, pair sell and buy orders between two traders, matching the order and settling the transaction. With broker platforms, such as Coinbase, the trader directly sells his coins to the broker, which then converts the coin into your currency of choice.
Step 1: Create an exchange account
Signing up means that you will have to supply personal information, such as email, name, address, phone number, and more. Depending on the exchange, volume limits, country of residency, and legislation, you will have to comply with different forms of “Know Your Customer” rules, which require some form of ID. Verification times vary depending on the service used.
Step 2: Deposit Bitcoin funds to your exchange wallet
From your external Bitcoin wallet, you will have to transfer your funds into your newly created account wallet provided by the exchange.
Select how much bitcoin you want to send over and wait for the confirmation before the funds are credited to your exchange wallet. This process might take hours or even days if the network is congested.
Step 3: Link Bank/PayPal/E-wallet Account
Moving fiat funds is commonly done through international wire transfer, and most exchanges support this withdrawal option. However, there are several exchanges that have started to accept credit and debit card withdrawals.
Another popular alternative featured in most European crypto exchanges is SEPA, which stands for Single European Payments Area. SEPA is an international system that allows members of the European Union to transfer money amongst themselves more efficiently.
Keep in mind that every payment method comes with its advantages and disadvantages. Transfer times can take up to several days, and, in most cases, there are additional fees charged by the bank or payment processor.
Step 4: Place a sell order
Go to your exchange’s market’s order book, where you will find the list of buy and sell orders. You should get acquainted with some terms if you want to know how to sell bitcoins. The buy orders are called bids because people bid on the buying price of Bitcoin. The sell orders are called asks, as they show the asking price requested by the seller.
Now let’s place a sell order. Select the sell Bitcoin order and put in how much Bitcoin you want to sell. You can either place a “sell order” to sell Bitcoin at the current market price, or you can place a “limit” order, which will only sell your Bitcoin at a price set by you.
After the trade has been done, your Bitcoin will be transferred taken from your account, and your chosen fiat currency or crypto will be deposited into their respective exchange wallet.
Step 5: Transfer your funds to your bank account
After the trade has been completed, you will have to transfer the money from the exchange. Select the withdraw method most convenient to you and choose the amount you want to send to your bank account. Check all the inputted data to see if it is correct, and then select “Withdraw” to complete the transaction.
Note: Even though exchanges provide wallet services, it is not recommended that you keep your funds in their wallets. This is because they are not as secure as custodial wallets, and there have been many instances in which hackers have stolen funds from exchanges, or they have suddenly shut down and taken the users’ funds with them. After you have finished your trading, it is always important that you move your funds into your private wallet or account.
How to Sell Bitcoin Through P2P Trading
Peer-to-peer trading marketplaces are platforms that bring together people that are either looking to buy or to sell their bitcoin.
Platforms such as LocalBitcoins or Paxful let users post their Bitcoin sell offer and wait for another person to respond. Then, they will have to negotiate the payment method, price, and other conditions for the trade. There is also the option to meet in person and receive cash for your Bitcoins after you have both agreed on a time and place. The advantages are that you do not have to pay the conversion fees charged by exchanges or any bank transfer fees, but there is the risk that you might encounter malicious scammers that are out to get your Bitcoin.
Be sure to take extra safety precautions, such as meeting in a public space to prevent any attacks.
The P2P services also provide an escrow service for online transactions, which only releases the funds when the buyer has paid.
How to Sell Bitcoin via ATMs
Bitcoin ATMs look just like traditional ATMs, but they support conversions with Bitcoin. They are connected to the Internet instead of a bank account, which facilitates the Bitcoin transactions.
The buy and sell option is not available at all Bitcoin ATMs, as some operators might choose to disable the sell option. The ATMs that have both buy and sell functions are Robocoin, Genesis1 and Satoshi2 from Genesis Coin, BitAccess, and BATMThree model from General Bytes.
While the service is instant, ATMs usually charge very high costs, with fees reportedly at around seven percent.
Also, Bitcoin ATMs cannot be found everywhere. You should first consult the Bitcoin ATM map to see if there is one in your area.
Step 1: Create account and verify identity
In some cases, the provider might ask you to have an existing account on its service to sell your bitcoin. Providers like Robocoin ATM, have lengthy a registration process, which involves providing a telephone number for activation and notifications, government-issued ID, palm scan, and a current photo taken by the ATM’s webcam.
While the process varies from provider to provider, you will be most likely prompted for some form of ID verification if you are going to sell bitcoin.
Step 2: Scan QR code and send Bitcoin
After you have passed the verification process, you will receive a QR code with a wallet address printed on it. Transfer the coins to that address.
Step 3: Receive funds
Your ATM will either give you cash instantly, or you will get a redeem code, which requires that you wait for the transaction confirmation. While most of the time, one confirmation is sufficient, in some cases, even six confirmations were needed before withdrawing the fiat funds.
How to Sell Bitcoin at a Negotiated Price
Bitcoin’s “price” is actually the price of the last trade that was ever made on a trading platform. The important thing to keep in mind is that, unlike fiat currency, bitcoin does not have a single price at which it is traded globally.
As Bitcoin’s price constantly fluctuates, the final exchange rate is usually that resulted from leading exchanges.
When selling bitcoin in person, it is important to keep in mind local fluctuations in Bitcoin’s price, as the exchange rate can differ from country to country. This discrepancy is because the exchanges from these countries include different Bitcoin trades in the local, national currency.
There are various meet-ups around the world in which participants can buy and sell Bitcoin and other digital currencies at negotiated prices.
Regardless of how you sell your bitcoin, it is imperative that you take all the safety precautions necessary. Practice due diligence when selecting an exchange, broker, and P2P marketplace before signing up and make sure it is the most convenient option for you.
Featured image: unsplash.com
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