How to Sell Bitcoin – Bitcoin Magazine
Introduction
The global geopolitical and economic scenario is becoming more serious every day, and even some institutional figures in the financial world, such as Bill Miller, have recently come out to say that bitcoin is an “insurance against financial disaster.” To understand why that might be the case, take the time to read our Bitcoin guide.
If you have bought bitcoin in the past, there are various reasons why you might want to sell it. You may be a trader looking to make some profit or a pleb who needs the financial lift and has no other option but to sell some of your stack. Whatever the reason, we will present five different ways to sell your bitcoin.
The selling process is often the opposite of the buying method and should be relatively easy to manage. But before we explore how to sell bitcoin, there are a few considerations to take into account.
Important considerations before you sell
- Fees for trading bitcoin can be a significant barrier, and you should always consider this implication when deciding to sell your bitcoin. If your bitcoin is sitting in the same exchange where you bought it, you should review their commissions, as they may have changed over time. Remember that a mining fee is also automatically charged by the Bitcoin network itself (not your exchange) and cannot be avoided when sending bitcoin from one address to another. Mining fees contribute to network efficiency by paying miners for their work.
Especially during low trading periods, such as when the bitcoin price is moving sideways and volatility is low, some exchanges tend to offer zero-fee trading promotions to encourage more traffic and generate more liquidity.
- If your exchange fees are too high, consider sending your bitcoin to a more convenient service that offers more competitive rates. Usually withdrawing your fiat currency to your bank account is free or comes with a small commission; However, it’s always worth checking your service provider’s terms and conditions to avoid last-minute surprises.
- Your privacy may be at risk when you sell your bitcoin. Unless you use peer-to-peer cash-in-hand operations or soft-to-no KYC services, the chances of your bitcoin sales being tracked are very high. Carefully consider whether it is worth disclosing your data for the sake of convenience, or whether making an extra effort to explore other options can give you more peace of mind with your personal data. Be sure to read our guide to understand how to buy and sell Bitcoin anonymously.
- Withdrawal limits must always be assessed. If your sales exceed the service provider’s daily or monthly allowance limit, you may incur a significant fee. In the case of high trading volumes and large withdrawal amounts, you should also expect stricter KYC procedures in place.
You can sell for cash or withdraw the money to your bank account, but you can also sell for stablecoins. In this case, it is crucial to secure your funds and transfer them to your personal digital wallet, possibly a cold storage wallet that provides offline security.
- Taxes must always be considered as they are likely to be owed when you sell your bitcoin, unless you live in an extremely Bitcoin-friendly jurisdiction. There is no consistent regulation between countries regarding the taxation of digital assets such as bitcoin; However, the general rule is that you must pay capital gains tax if you have had a profit.
Depending on the amount you sell, the tax owed could be a good portion of the funds you have sold. Check your country’s tax laws to be aware of the tax’s implications.
Read more >> Think before you sell Bitcoin
Frequently Asked Questions
How can I sell Bitcoin for cash?
The easiest way to sell bitcoin for cash is at ATMs, in person. Make sure you trust the person you are going to meet for the exchange, so as not to risk being scammed or more serious consequences. Remember that many people will go to great lengths to get hold of your bitcoin, and prioritizing security when exchanging in person should be a must.
Is it easy to sell Bitcoin?
Bitcoin is the most liquid of all cryptocurrencies, so it is relatively easy to sell, especially in high-volume mainstream crypto exchanges that provide market/maker (instant) orders. If you are targeting a specific price for your sale, you can simply select the preferred bitcoin price and wait for your bid to be fulfilled.
What is the best way to sell Bitcoin?
The best way to sell bitcoin depends on your circumstances. Whether you are looking for more anonymity, cost-effective transactions or a practical and quick settlement, there is always an option for you which we explore in the section below.
Five Ways to Sell Bitcoin
The easiest method to sell your bitcoin is often based on how you bought it. If you have already used a particular service provider (ie exchange) to buy BTC, selling through that service provider should be just as easy. Bartering is the most popular method of buying and selling bitcoin; but keep in mind the considerations highlighted above before deciding which is best for you.
However, there are other options that you may want to consider when selling bitcoin, and we list them here, along with a step-by-step guide on how to go through the process and the requirements needed.
Hopefully, the bitcoin you want to sell is secured in a cool box. If so, the first step is to transfer the asset to your chosen service provider.
1. P2P
There is no second best for privacy and security. Decentralized, peer-to-peer and KYC-free marketplaces are the future of Bitcoin transactions that the Bitcoiner community is trying to create worldwide, and due to the fundamental nature of the cryptocurrency, it should be the preferred choice for Bitcoiners and privacy advocates.
Such marketplaces match a buyer and a seller and offer various types of payments, including bank transfers, gift cards for use in online stores and even cash. You can see our “How to Buy Bitcoin Anonymously” article to learn more about it.
Step 1: Download the service app on your mobile phone or install it on your computer;
Step 2: Transfer the bitcoin funds from your wallet to the p2p provider if your BTC is not already there;
Step 3: Make an offer and choose the payment method you want to accept from your buyer and specify the amount of bitcoin you want to sell; you can also review buyer lists to see if you can match a buyer’s offer;
Step 4: When a buyer accepts your offer, bitcoin is automatically transferred from your wallet to the temporary deposit from the marketplace’s escrow service;
Step 5: Wait for the buyer’s payment to be processed and your transaction will be completed. You can now withdraw your money to your bank account.
2. Switch:
Exchanges are middlemen in the buying and selling transaction, and hold the assets from both sides, so that there can be no dispute when the transaction is done. If you’re looking for convenience over privacy, exchanges can be ideal, and the good news is that typically no – or less – KYC is required to transfer cryptocurrency.
However, you will need to go through identity verification and link your bank account to withdraw the money (in local currency) earned from the sale.
Step 1: Unless you already have one, open an account with the exchange you want to use and transfer your bitcoin there;
Step 2: Most exchanges have a dedicated trading account, separate from the main account, and you need to transfer your bitcoin there in order to sell it. However, it usually only takes one click, and is often a free and instant transfer;
Step 3: The trading account will give you the option to execute a market, limit or stop order; choose the one that best suits your trading strategy, the amount and the fiat currency you want to use for the trade;
Step 4: Click “sell” and when your order is completed, you can transfer it back to the main exchange account if necessary;
Step 5: Withdraw your money to your bank account.
3. ATMs/BTMs
The fastest and easiest way to sell BTC is to use a Bitcoin ATM, provided there is one nearby. Some will require little or no KYC; however, their fees are much higher than other exchange providers. It may be worth considering that you can only receive the proceeds of the sale in cash from an ATM, so this should probably be a preferred method for trading with smaller amounts.
Step 1: Find a Bitcoin ATM near you on CoinATMRadar.com. Remember that most ATMs only offer a buy service, so make sure you can sell at the chosen machine;
Step 2: Most ATMs require you to verify your identity, so bring an ID document;
Step 3: Select “sell bitcoin” when prompted for this option;
Step 4: Scan the QR code on your screen, as it contains the address where you will send your bitcoin;
Step 5: You will probably only have to wait for one confirmation before you can cash out the sale. This can be almost immediate, or at worst take a few minutes.
4. Brokers
Bitcoin brokerage marketplaces are growing worldwide due to their diversified offerings, including futures contracts and assets beyond digital currencies. Some even allow you to trade bitcoin directly, 24/7, and with competitive fees. You should choose this third-party service if you are interested in trading derivatives and multiple assets.
Step 1: Choose your broker and open an account with them;
Step 2: Transfer your bitcoin from your personal wallet to the provider’s wallet;
Step 3: Since brokers offer trading in different assets and commodities, you need to choose the right account that allows you to sell bitcoin;
Step 4: Set up your trade by selecting the order type you want;
Step 5: Once the sale is done, you can withdraw your money to your linked bank account.
5. Payment apps
Payment apps are the fastest and easiest way to buy and sell bitcoin, and a growing number are emerging as peer-to-peer services. You pay for convenience with usually higher fees than exchanges, but they have brought in millions worldwide due to their broad user base.
You may already have an account with one of the popular payment apps such as Strike or Revolut that you use for your daily financial activities. If you don’t, you may find it helpful to open one.
Some apps are geographically restricted to certain countries; therefore, check their terms beforehand, as you may be denied access if your jurisdiction is not included in their service.
Step 1: Download the preferred app on your mobile phone and go through usually soft-KYC verification which only requires basic information;
Step 2: Link your bank account;
Step 3: Transfer BTC from your wallet unless you have already purchased some through the same app;
Step 4: Select the “bitcoin” tab that appears in the app and select “sell” plus the amount to sell;
Step 5: Once the transaction is completed, you can withdraw to your bank account.
Conclusion
Once you’ve bought bitcoin, selling it is easy from a practical level. To get started, you just need an account with the relevant exchange you want to use and some bitcoin in the exchange wallet to sell. Select order type and click sell after considering trading and withdrawal fees.
The difficult part of the selling process is parting with sound money in exchange for fiat currencies that have been going through a financial and systematic crisis for a long time now.
As Satoshi Nakamoto once suggested, “It might make sense to get some just in case it catches on,” which 14 years later revealed to be a startling prophecy. However, the circumstances of life can prevail over the personal belief that bitcoin is the natural evolution of money, and there should never be judgment for people who want or need to sell it.
