So you want to sell your Bitcoin; well good idea! While volatile, Bitcoin has proven its value as a decentralized cryptocurrency for over a decade. And there are many options available to cash out.
There are many ways that you can cash in on your investment. If you want to sell your Bitcoin, you can use the following methods:
- Cryptocurrency Exchanges, which have subscribed to KYC and AML standards
- Fully Decentralized Exchanges
- In-Person, or Cash Exchanges
The way you choose exactly to sell your Bitcoin is totally up to you. The only limitations are going to be your tech-savvy or desired trading pairs.
That is, some exchanges have more trading pairs than others, and therefore if you are using a non-major currency or cryptocurrency you may need to select an exchange that accepts your method of payment.
Or, if you are more comfortable with the technology and like having more control and anonymity, you may opt for a fully decentralized peer-to-peer exchange.
This article takes you through the basics of all of the above methods of selling your Bitcoin. The method you choose will be based on many factors, and so this article should not be taken as an endorsement of any particular platform for the sale of your Bitcoin.
To do so, we focus on explaining how to use specific exchanges and platforms to do so. In this article we go through how to sell Bitcoin on the following exchanges and platforms:
Coinbase operates in over 100 countries around the world and has over 35 million customers. To begin, you will need to set up an account, which includes verifying an email address and adding a method of payment.
Once this is done, you can buy and sell Bitcoin. Coinbase makes this very easy and has its own digital wallet.
Coinbase offers its own proprietary digital wallets, uses cold storage, and is well insured. However, typically it is not recommended that you store large amounts of Bitcoin or any other cryptocurrency in a digital wallet or on an exchange. The most secure option is to use cold storage (offline storage) and to keep in your wallet only the amount you plan to sell, or use to buy.
Based on your method of there are several tiers for transaction fees. The fees are based on the country of the bank account, the method of payment, such as a debit or credit card. Transaction fees on Coinbase are both a flat rate and a percentage of the Bitcoin transaction for sale.
When you buy or sell Bitcoin with Coinbase you are also subject to the fees incurred from the spread, this is what they refer to as the “customer exchange rate.” This fee is established by adding a margin also called the “spread”. It is added to the market exchange rate on Coinbase Pro or the “Pro exchange rate”.
The cost of the spread charged is around 0.50% for both cryptocurrency purchases and sales. Spread is based on the fluctuation of the price of Bitcoin, however. This means that the final spread price may be higher or lower as a result of the market fluctuations. The actual price is the price at the time of execution of the sale, and so may not be the same as the price quoted.
Finally, each bank may have its own transaction fees that apply to Coinbase transactions.
If you are dealing with Canadian dollars, you may want to use BitBuy to sell your Bitcoin. Bitbuy is a Toronto based company, with a very easy to use platform. You require a minimum of $50 CAD to make a withdrawal from your bitbuy account.
In order to sell your Bitcoin, you will have to move them into account on bitbuy. Once that is done you follow the simple steps, which are explained here.
Like other exchanges, bitbuy also has fees. All buys and sales have a 0.5% fee, as well as withdrawal and deposit fees.
As this site only accepts Canadian dollars the fees are slightly more straightforward than others. However, that is primarily because they do not operate with Euros or USD, and so the fees are not complicated.
Coinsquare is another option that accepts Canadian and American currency. They work in a similar way to the other user-friendly platforms we have gone through. The major difference is the fee structure, as Coinsquare only charges 0.4% for transactions to sell (or buy) Bitcoin. While the typical fee is usually 0.5%, depending on the size of your transactions, these costs add up.
LocalBitcoins was once a totally decentralized and anonymous peer-to-peer exchange for cryptocurrency. However, the Finish based company has been forced to comply with current KYC and AML compliances as of 2019.
If you are interested in selling for Bitcoin for cash, or even in person, then you will want to investigate LocalBitcoins.
LocalBitcoin requires that you make connections peer-to-peer in order to sell (or buy) cryptocurrency. That means that they are not a brokerage firm, but essentially supply a platform that makes meeting others interested in cryptocurrency exchanges possible. However, they do offer an escrow service.
- LocalBitcoins accepts many methods of payment and many fiat-currencies.
- The platform charges a flat 1% fee on all trades.
- It is one of the most anonymous methods of Bitcoin exchange.
- There are no buying or selling limits, again this is up to the users.
Note: With LocalBitcoins it is possible to make in-person transactions. This means of transacting is entirely up to users’ discretion and all necessary safety precautions should be made. Finally, LocalBitcoins is not legal everywhere, including New York state, so make sure you look into the limitations around using this exchange.
For another peer-to-peer option, you can use Bisq to sell your Bitcoin. Bisq is unique among the others listed because it is its own network -so it is a fully decentralized online exchange (DAO -decentralized autonomous organization).
Because it is its own network, Bisq works with its own software, you can think of it more like Napster or Limewire, where users freely share information.
Most exchanges at this point are centralized, which is why they offer customer services and other proprietary tools. However, this also means that the other exchanges have a lot less anonymity than networks like Bisq, and even LocalBitcoin.
Bisq was designed to manage offers for trade using a peer-to-peer network. It is made up of a global network of people who run Bisq on their own computers. Essentially, with Bisq software you run an exchange locally. This has many benefits for users as centralized services are monitored. However, peer-to-peer networks like BitTorrent, Bitcoin, and Bisq are much more difficult to surveil, censor, or hack.
With the Bisq DAO, users can easily make Bitcoin transfer from traders to contributors. This requires the use of the BSQ token, which makes decentralized transactions possible. As such, trading fees are distributed to contributors and are not subject to the same KYC and AML limitations of a corporation. This also means that fees will vary based on the specifications of the transaction.
Another of the fully decentralized exchanges is HodlHodl. They never take possession of your funds which is meant to protect users from exchange hacks. It also means that HodlHodl is exempt from needing to collect private information about users.
“We think (collecting this data) does more harm (than good) by exposing law-abiding users to fraudsters and criminals. The information and documents users upload to exchanges have been stolen many times in the past. It also does very little to prevent actual money laundering and criminals from using those services. They always find ways.”– Roman Snitko CTO, HodlHodl
It has also recently become an open-sourced exchange. That means that anyone who wants to can copy the program is able to, and then they will be able to start their own version. It is permissioned, however, which means that users must obtain source code from HodlHodl.
There are a few more ways to sell your Bitcoin that require little or no intervention from an exchange:
- Private sales
- BTC ATMs
Private sales are very straight forward, they work a lot like an email. So if you have a personal friend or acquaintance, you simply transfer their funds to the account that they give you.
Finally, there are physical ATMs where you can exchange Bitcoin for fiat currency. The easiest way to find them is to check on the Bitcoin ATM map. Once you have selected an ATM location, you are given access to important specifics about the ATM.
Be aware that some ATMs require more identification than others. So it is best to know in advance so that you are prepared, and so you can decide if you would like to offer your personal information at all.
How you sell your Bitcoin is really going to depend on your comfort with the tech as well as your financial needs. We suggest looking through a few methods, the exchanges listed here are a good place to start.
But be sure to find the one that suits you best, and that you know what is under the hood. Be comfortable with what kind of information and fees that the exchange expects the users to offer.
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