With the growing popularity of digital assets such as Bitcoin, more people are investing in cryptocurrencies. Because of this, it is crucial to learn how to sell Bitcoins to maximize the return on your investment.
In this article, we’ll provide you with the tools you need to succeed in the fast-paced world of cryptocurrency trading.
Table of Contents
What is a Bitcoin?
Bitcoin is a digital currency that operates independently of a governing body, financial institutions, and even governments.
It is not a tangible currency. Bitcoin only exists as digital data stored in the blockchain. The blockchain is a distributed public ledger that verifies and records all Bitcoin transactions.
Consensus on ownership is maintained, and new blocks of transactions are added to the blockchain publicly and broadcast typically every 10 minutes via mining.
Bitcoin eventually developed into a commodity that can be stored and sold for value, much like gold. It is a decentralized and scarce currency that is both safe and in demand.
Selling Bitcoin
The ultimate goal of Bitcoin is to replace traditional currencies. Furthermore, its current attractiveness comes from its status as a commodity with a potential value increase.
However, unlike government-controlled currencies, the demand defines the exchange rate for Bitcoin.
It may be beneficial to maintain Bitcoin if you hold it. However, despite a crypto market decline in 2022, the current rise in demand may give a chance to profit by selling Bitcoin.
How to sell Bitcoins?
Converting Bitcoin into traditional currency is similar to exchanging currencies when traveling to a new country. This process involves selling your Bitcoin and buying the equivalent value in euros or your preferred currency.
Here’s what you need to do to convert Bitcoin back into fiat currency:
Step 1: Decide where to sell Bitcoin
Consider deposit, trading costs, and withdrawal fees when withdrawing funds to a bank account. Look for an exchange that has lower fees or even no withdrawal fee.
Step 2: Create an account.
Sign up for a cryptocurrency exchange by providing your email or phone number, creating a password, and agreeing to the terms. Complete the KYC process to verify your identity.
Step 3: Deposit Bitcoin
Navigate to the Bitcoin wallet or balances page, find “Bitcoin,” and click “Deposit.” Copy the provided Bitcoin wallet address and send your BTC from an external digital wallet. Wait for the deposit to be confirmed.
Step 4: Sell Bitcoin
Once your Bitcoin is in the exchange account, you can sell Bitcoin through various methods like instant sell, market order, or limit order. You can trade Bitcoin for other cryptocurrencies.
However, you may buy fiat currencies and cash them out by depositing Bitcoin into your bank account or PayPal account. Note that every trading platform may have a different withdrawal fee.
swissmoney App
Methods of selling Bitcoin
There are numerous methods how to sell Bitcoins. However, here are the most popular ones.
Crypto exchanges
Using crypto exchanges is one of the simplest ways to cash out your cryptocurrency. Typically, they provide a simple exchange process that allows you to choose the cryptocurrency and amount you want to sell.
If you choose this method, you must create an account, verify your identity, and link your bank account. When you make a transaction, your cryptocurrency is converted to fiat currency and deposited into your bank account.
After you sell your Bitcoin for local currency, you can withdraw funds to your bank account or Paypal account by following the exchange’s instructions. Then you can make any bank transfers using the money you have withdrawn.
However, due to potential hazards associated with digital asset control and security, it is critical to take caution when using a cryptocurrency exchange.
Third-party broker exchanges
The most convenient way to sell BTC held by a broker is to stick with that broker. This withdrawal method allows you to deposit Bitcoin, convert it to fiat currency, and withdraw the funds to your bank account.
Note that brokers adhere to money laundering laws. Therefore, you’ll need to withdraw money to the same bank account you deposited with.
Though simple and secure, this payment method may not be the fastest, with money reaching your account in about 4-6 days on average, varying by country. Associated transaction fees also depend on your bank’s location.
Peer-to-peer trade
Peer-to-peer exchanges provide faster payments and more anonymous transactions, and potentially better rates than centralized exchanges. They are becoming popular alternatives for selling Bitcoin.
Peer-to-peer exchanges do not require identity verification. They accept various payment methods and are not forcing you to give up control of your funds.
Here’s a step-by-step guide on how to make a peer-to-peer exchange:
- Select a peer-to-peer trade platform
- Sign up and choose your preferred location
- Create a listing with your desired pricing, an approved payment method, and any associated fees
- Search for buyers and send trade requests
Some platforms provide an escrow option, which holds your Bitcoin until you confirm receipt of payment from the buyer.
Furthermore, peer-to-peer platforms frequently include a rating system that allows you to write comments about the buyer or seller, increasing safety.
You can remain anonymous, though, by utilizing a VPN and accepting payment options such as online money or gift certificates.
Remember that if you’re cautious, peer-to-peer selling can be risk-free. However, beware of potential scams and check the laws in your region regarding selling limits. Also, always verify the buyer’s identity and payment before releasing your Bitcoins.
Selling Bitcoins with the swissmoney wallet
The digital wallet offered by swissmoney lets users effortlessly buy and sell cryptocurrencies in exchange for EUR and USD. Also, users can transfer cryptocurrencies to someone else or receive them as a deposit.
Moreover, the platform provides real-time exchange rates. Therefore, buyers can take advantage of market fluctuations and optimize their financial strategies.
Here’s a step-by-step breakdown of how to sell Bitcoins at swissmoney:
- Open the platform and choose the “Assets” section.
- Choose Bitcoin and add a new wallet if you haven’t already.
- Determine the specific amount of Bitcoin you wish to sell. You can enter the amount in either your local currency or Bitcoin terms.
- Confirm the transaction and sell Bitcoin.
However, if you don’t have an international bank account, follow the instructions to open one.
Bitcoin ATMs
Bitcoin ATM is a machine that allows you to sell your Bitcoin and receive cash immediately. They provide a QR code to which you send your Bitcoin, and after a short wait, you get your cash.
Selling Bitcoin at a Bitcoin ATM usually involves:
- finding the machine
- going through a verification process
- choosing the sell option
- Determining how much Bitcoin you want to sell.
After sending your Bitcoin to the Bitcoin ATM, it will process the transaction and dispense your cash. It is similar to using a traditional ATM for cash withdrawal.
However, these trades may have high transaction fees, so it’s essential to consider the costs before using this method. Moreover, not all Bitcoin ATMs allow you to sell your Bitcoin. Also, some have limits on withdrawal amounts.
While Bitcoin ATMs used to be common worldwide, they are no longer allowed in the UK. It is due to regulatory concerns and the high risks associated with cryptocurrencies.
Before their removal, fees on these ATMs were often higher than other options, making them less recommended for selling BTC.
Factors to consider when selling Bitcoins
When deciding whether or not to convert your Bitcoin into cash, you must stay informed of the various conditions and risks involved.
First, if you profit from selling your Bitcoin, you will be required to pay taxes on that profit.
The majority of third-party broker exchanges will disclose transactions for tax purposes. In addition, there is a possibility that you may have to pay exchange fees.
Also, decide if you want to sell Bitcoin for fiat money or another cryptocurrency and how quickly you want to sell it. Evaluate whether you agree to the price lower than the current market rate or would rather negotiate for the best price.
When comparing various cryptocurrency exchanges, take into account several different variables.
They include exchange rates, trading and withdrawal fees, limitations on selling and withdrawing, security features, the availability of customer service, the platform’s reputation, and reviews.
Moreover, it is crucial to ask yourself specific questions to decide the proper alternative for selling your Bitcoin. The best way to do so will depend on the specifics of your situation.
In addition, it is important to investigate the exchange to determine whether or not it is regulated and which payment methods are accepted.
FAQ
How can I sell my Bitcoins for cash?
There are a few different routes you can take to turn Bitcoin into fiat. Using cryptocurrency exchanges, peer-to-peer transactions, Bitcoin ATMs, or selling Bitcoin directly to individuals or businesses are the most prevalent alternatives.
Other methods include mining, staking, and mining pools.
Can you sell Bitcoin for cash in the UK?
In the UK, there are various platforms available to sell crypto. However, it’s essential to be aware that crypto assets are highly volatile and unregulated in the UK. It has no consumer protection.
Nevertheless, there is nothing illegal about buying and selling crypto if you declare any gains and pay relevant taxes.
To mitigate risks, using a crypto exchange registered with the FCA’s crypto asset register is considered the least risky option for crypto asset traders in the UK.
Note that capital gains tax on profits may apply when dealing with cryptocurrencies.
Are there any taxes for converting Bitcoin to cash?
In most cases, cryptocurrencies are treated as digital assets and are subject to long-term or short-term capital gains taxes by the IRS and many other countries.
Therefore selling or exchanging crypto may have tax implications depending on your jurisdiction. It is advisable to consult to understand your specific obligations and reporting requirements.
Is it difficult to sell Bitcoin?
Selling Bitcoin is not difficult, as it has the highest daily trading volume among crypto assets, and you can sell it through various avenues.
The easiest way to sell Bitcoins is through an exchange. However, the ease or difficulty of selling crypto depends on your abilities and the method of sale you choose.
Can I sell my Bitcoin to another person?
Yes, you can make in-person trades. One way to do this is through peer-to-peer platforms or local Bitcoin meetups.
You can connect with potential buyers willing to purchase Bitcoin in exchange for cash. To send Bitcoin, all you need is the buyer’s Bitcoin address.
Nonetheless, it’s essential to prioritize safety during such transactions and conduct them in secure environments.