How to Sell Bitcoin
The 2 main methods of Bitcoin realization are through bitcoin wallet add-ons and concentrated cryptocurrency exchanges (CEX), which allow to realization of bitcoin in fiat currency.
Using a Bitcoin wallet add-on that allows you to realize fiat currency is considered more harmless, as CEXs are associated with real risks, combined with the control and security of your numerical assets.
In case you decide to utilize CEX, keeping Bitcoin dormant for a long period is strongly not recommended.
There are two main methods of turning Bitcoin into a local currency:
Bitcoin wallet apps
These add-ons allow users to save, retrieve, and send cryptocurrencies, including bitcoin. Certain wallet apps also allow users to convert their cryptocurrencies into fiat currency directly in the add-on.
The practicality of use
Numerous add-ons for cryptocurrency wallets are invented in such a way as to be comfortable for users, which allows them to freely dispose of and realize their bitcoins.
Certain wallet applications, such as the Bitcoin.com Wallet add-on, give users control over their private keys, which means that they have absolute access to their resources.
Narrow high liquidity
Compared to cryptocurrency exchanges, wallet apps have the lowest high liquidity, which is probably able to influence the price, according to which you can realize your Bitcoin.
Wallet apps in some cases do not have any accrued features, such as trader vaporization, limit orders, or advanced trading research.
These crypto exchanges are online platforms in which users can exchange cryptocurrencies, such as bitcoin, into other assets, such as other cryptocurrencies or fiat currency. CEX are designated as arbitrageurs and are managed by outside firms.
Significant high liquidity
Concentrated exchanges have a chance to be large sales sizes, which means that you can effectively realize your bitcoin according to the bazaar direction.
Numerous CEXs provide trading functions for experienced users, for example, instrument specialists.
Lack of control
If you save bitcoin in CEX, private sources stay with the exchange, which means that you will not be able to control your resources.
Outages and hacks
Exchanges, including high-end ones, have been plagued by devastating bankruptcies, keeping former users together with no clear ability to return their resources to the exchange.
In addition, in the past CEXs have been targeted for hacking. Despite in such a case, that because of the past years, the degree of security has increased, the threat is still there without exception.
Both Bitcoin wallet add-ons and concentrated exchanges call for proof of persona to realize bitcoin because of the neighborhood monetary unit. Both these and others utilize interchange service, which is considered a controlled profitable endeavor.
Such firms are required to adhere to the principles of Know Your Customer (KYC) and Anti-Money Laundering (AML).
These principles call for the collection and retention of customer data, including proof of person and, in some cases, proof of address.
As an option, you will be able to sell bitcoins according to the peer-to-peer principle.
If you realize bitcoins according to the principle of “peer-to-peer”, you can at a particular level pass the classical banking concept, for example, receiving payment in cash, using a payment add-on, such as PayPal, or paying for the operation with products or offers.
In case you represent someone who wants to realize Bitcoin, you can buy it directly from this person.
As an option, there are several platforms, which designate as a sphere of choice, helping merchants to find consumers and vice versa.
Then consumers and merchants call each other about transactions.
Why do I need to verify my identity to sell Bitcoin?
When you sell Bitcoin through an exchange service, you are interacting with a regulated business. Such businesses must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. These rules require the collection and storage of customer information, including identification documents and sometimes proof of address. These rules are put in place to prevent tax evasion and terrorist financing.
What are the fees for selling Bitcoin?
The fees for selling Bitcoin depend on the payment method and the platform/platform used.
For example, if you sell Bitcoin directly to a friend and pay in cash, you will only need to consider the “network fee” for sending Bitcoin from your digital wallet to your friend’s digital wallet.
If you receive cash via wire transfer, you’ll have to factor in the associated fees, of course.
Exchanges also charge fees for facilitating transactions. These fees cover the operating costs of the exchanges plus a small margin
How to sell bitcoin? A few solutions
If you have prepared everything, bought a few coins, waited for the price to rise and now you want to sell your Bitcoin, the first hurdle is how to sell it. There are several ways to sell Bitcoin, each with its advantages and disadvantages, so you should consider which one is right for you before proceeding.
Exchanges are the easiest way to sell bitcoin. Transactions are almost instantaneous, you can get up-to-date information as the trades progress, there’s little chance of things going wrong, and you probably already have an exchange account that you used to buy coins in the beginning.
However, exchanges are not suitable for everyone.
They have to charge a fee to keep the service running, so they aren’t always the cheapest.
In addition, an exchange restricts you to only certain payment methods, and transactions are monitored by some centralized organization – exactly what many cryptocurrency users are against.
A good exchanger is nice, but if you want to avoid prying eyes, cash is the way to go. Of course, you can’t just grab cash from your computer, but there are devices called Bitcoin ATMs that allow you to do just that.
Similar to a regular ATM, these devices allow you to enter your Bitcoin wallet address and withdraw cash. While not impossible, this method is much harder to track than a wire transfer.
You can also use these ATMs to buy Bitcoin. So if there is such an ATM nearby, it will be harder for you to know what you are buying.
However, you are very dependent on whether there is such an ATM near you.
So a lot of people find it difficult to use bitcoin ATMs, and if you move, your transactions will lag far behind the rapid movements of the market.
Selling Bitcoin on a cryptocurrency exchange
As mentioned above, selling Bitcoin on a cryptocurrency exchange involves real risks related to the control and security of your digital assets.
If you decide to use CEX, storing Bitcoin on it for an extended period is strongly discouraged.
When using this method, you will need to create an account, confirm your identity, and connect a bank account.
Once you sell your bitcoin into local currency, you will be able to withdraw that currency into your bank account. The typical process is as follows:
- Visit a cryptocurrency exchange.
- Create an account and confirm your identity.
- Follow the site’s instructions to sell your Bitcoin (BTC) or other digital asset.
- Withdraw the funds to your bank account.
P2P online trading
Instead of doing all the work for you, a peer-to-peer (P2P) exchange lets you choose your price, and the platform helps you find a buyer willing to pay it.
Both parties then decide how they want to be paid. Sometimes this can be done directly on the site, which is often referred to as direct transactions, but usually involves a separate bank transfer.
P2P trading allows you to sell cryptocurrency without restrictions from the exchange. This means you can make a bank transfer, send gift cards to popular online stores, exchange cash in the real world, or even send expensive artwork if that’s what you want; as long as both parties agree and you’re on a P2P platform that doesn’t restrict payment methods.
There are some issues here, such as what happens if the buyer doesn’t pay, and peer-to-peer marketplaces will still have some information about who you are.
Still, it’s a good move if freedom of choice and minimal interference are your priorities, while also having access to things like escrows to store bitcoins for fraud protection.
Selling Bitcoin through peer-to-peer networks
Various platforms facilitate the trading of bitcoin and other crypto assets by offering buyers and sellers 1) a place to place buy and sell orders and 2) escrow and dispute resolution services.
Because these platforms help people find each other, they are not technically classified as exchanges or “money transmitters” in many jurisdictions, so in some cases, they don’t require you to reveal your identity to use them. For privacy-conscious buyers, P2P platforms can therefore be an attractive way to obtain bitcoin. This means that these platforms usually have no shortage of buyers.
However, because anonymity is possible on these platforms, there is a high likelihood of fraud.
For example, some people have fallen victim to the so-called “swap-for-fee” scam, where the buyer’s wallet shows that bitcoin has been received, but the transaction has not been validated on the blockchain.
The buyer then withdraws funds from the escrow, but the “received” bitcoin disappears from the buyer’s wallet. Read more about the replace-by-fee vulnerability here, and the steps you can take to avoid falling victim to it here.
When selling bitcoins through peer-to-peer networks, it’s also important to consider the laws in your region. In many regions, if you sell more than a certain daily and/or annual limit, you may find yourself on the wrong side of the law.
The process of selling Bitcoin using a P2P platform is usually as follows:
- Create an ad to sell the amount of bitcoins you want or view ads from people looking to buy.
- Initiate the transaction. When you do this, the bitcoins you sell will be blocked in an escrow account.
- Confirm that the agreed-upon payment amount has been received through the agreed-upon payment method. Note that this could potentially even mean meeting the buyer in person and accepting cash. When you confirm the payment, the platform will withdraw your Bitcoin to the buyer’s wallet.
Selling Bitcoin through a Bitcoin ATM is a convenient way to exchange Bitcoin for cash, although these ATMs are associated with high transaction fees and less favorable exchange rates.
It’s similar to using a traditional ATM, but instead of withdrawing money from your bank account, you’re selling Bitcoin from your cryptocurrency wallet. Here’s a brief description of how to do it:
- Find a bitcoin ATM.
- Depending on the ATM and the amount you want to exchange, you may have to go through a verification process. This may involve entering your cell phone number to get a verification code, or in some cases, providing your ID for verification.
- Choose the option to sell Bitcoin and enter the amount.
- Send your Bitcoin to the ATM.
- The ATM will process the transaction, which may take a few minutes, and give you cash.
Of course, if you want to prevent people from following you, trade in person. You give the person some cash, and they give you access to a coin wallet or send Bitcoin online. After that, it will be harder to get information on him than even Bitcoin ATMs – provided the other person doesn’t tell anyone.
However, in real life, there is no way to get an escrow – or rather, if there was, it would completely defeat the point of hiding money from outsiders. Therefore, bitcoin transactions in real life are much riskier than any online exchanges, and you should be careful if you choose this option.
Ways to Withdraw Money
After you have sold your Bitcoin and received some fiat currency into your digital wallet, you may want to withdraw those funds. There are three main ways to withdraw funds from online wallets. However, keep in mind that depending on the method you choose, the trading platform will charge different withdrawal fees, so be sure to familiarize yourself with them before choosing one method or another.
You may also have to verify your identity with an ID card, driver’s license, or passport before withdrawing funds. This is a step most exchanges are required to take to comply with anti-money laundering laws. It won’t take long, but you won’t be able to transfer your money without it.
The easiest way to withdraw your funds is to transfer them to your bank account. Once you have linked your bank details to your exchange account, you just need to find the “withdraw” option. This is usually found either in your wallet or on the main account page.
On the “Withdraw” page, simply select your bank account, specify how much you want to withdraw, and hit the confirm button. Before confirmation, a withdrawal fee will be shown – usually a small percentage of the payment amount or a fixed amount of a few dollars, so make sure you’re okay with this before proceeding.
PayPal and other payment services
Sometimes you may prefer to use a third-party payment service – perhaps to keep funds separate from your bank, not to disclose your bank details to the exchange, or simply to take advantage of a low flat fee. However, the services supported by each exchange may be different, and you will still need to connect your PayPal account or similar before getting started.
As with withdrawing funds to a bank account, first go to the “Withdraw” section. This time, however, you’ll need to choose a payment service – like PayPal or Faster Payments – instead of a bank account. Then simply enter the amount you want to withdraw, check if the additional fees are too high, and confirm that you want to withdraw the money.
If you don’t like the fact that digital banking can be tracked, or you just need cash and all you have is your Bitcoin wallet, you should consider withdrawing from a Bitcoin ATM. This will allow you to get your money immediately, but remember that you also can’t count on finding another ATM, so you’re usually left with the fees and restrictions of the ATM you’re at.
When you find such an ATM, you can use it just like you would a regular ATM. The only difference is that instead of entering your debit card and PIN, you enter your Bitcoin address. Just make sure no one is watching you while you enter it, as physical threats to your privacy are a potential problem with this method.
Bitcoin has become much easier to buy and trade in the few years of its existence. This also applies to selling bitcoin, which can now be done instantly at the market price. So, whether you want to get your money right now or are just looking ahead, you now know how to sell Bitcoin and withdraw that money.
However, no amount of trading knowledge will save you from the losses that cybercrime can cause. This is why you should always use a reliable antivirus to protect your computer and the best VPN for cryptocurrency trading to keep yourself safe online. A VPN will also help you buy and sell Bitcoin in countries where cryptocurrencies are banned.
You also need a strong password stored in a secure password manager to make it difficult for anyone to access your exchange account. In addition, it is not unreasonable to back up your bitcoin wallet.
Do you have bitcoin that you want to sell? Which of these methods have you used? Maybe we missed your favorite way to sell bitcoin? Let us know your thoughts in the comments section below. Thanks for reading.