A Guide To Selling Your Bitcoin

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Bitcoin
A Guide To Selling Your Bitcoin

How do you sell bitcoin, and when is the best time to do it? Click through to learn the best ways to sell bitcoin and what you should consider before selling your bitcoin stock! Selling bitcoin is easy, but knowing when to sell it is much more challenging. When should you sell bitcoin, and how do you sell it to get the best prices? Keep reading this guide for the answers!

Why Do I Need To Sell Bitcoin?

Generally, you sell bitcoin to secure profits or purchase something with fiat currency. Here are some common reasons to sell bitcoin:

Locking In Your Gains

One of the most common reasons to sell bitcoin is to secure your cryptocurrency gains. Bitcoin and other crypto assets are volatile, so there’s no guarantee of profit even if there’s a price surge at the moment. Selling off part of your bitcoin stock secures your profits – even if you lose everything else, you still have secured funds to withdraw. 

Cutting Your Losses

Bitcoin’s unpredictable price swings may lead you to suffer losses from depreciation. Rather than holding and hoping for another price uptick, sometimes it’s better to cut your losses and sell your bitcoin before the price drops even further. 

Diversifying Your Investments

The adage “don’t put all your eggs in one basket” also applies to crypto investing. With all the cryptocurrencies on the market, you shouldn’t limit yourself to just bitcoin. Selling off part of your bitcoin holdings frees cash up and lets you purchase alternative digital assets like Litecoin, Ether, and Cardano.

You don’t have to diversify into just crypto, either. Look into other investment vehicles like stocks, bonds, and real estate to further secure your money against depreciation.

Exchanging For Fiat Currency

While bitcoin was originally meant to become a replacement for fiat currency, not many stores have adopted bitcoin as a payment method. You likely need to sell some of your bitcoin to purchase things that cost fiat currency.

What To Prepare Before Selling Bitcoin

Here’s what you need to have before selling your bitcoin holdings:

  • A bitcoin wallet
  • Some bitcoin in the digital wallet
  • A bank account
  • A cryptocurrency exchange account

How Do I Sell Bitcoin? Three Best Ways To Sell Cryptocurrency

Different bitcoin selling methods have different advantages and disadvantages. Here, you’ll learn the three best ways to sell bitcoin:

Cryptocurrency Exchanges

Cryptocurrency exchanges like Binance and Crypto.com are among the best places to buy and sell digital currency. They provide a simple trading interface and support fiat withdrawals. 

Here’s how to sell your bitcoins holding on a crypto trading platform if you already have an external bitcoin wallet:

  1. Choose a cryptocurrency exchange.
  2. Register an account and go through verification.
  3. Input your bitcoin wallet address.
  4. Transfer the bitcoins you want to sell.
  5. Choose the type of currency you want in exchange for your bitcoins.
  6. Confirm your transaction and wait for it to complete.
  7. Receive your preferred currency.
  8. Transfer the currency back into your digital wallet or bank account.

Crypto exchange transactions can take a few seconds to complete. However, cash withdrawals may take several days to arrive in your bank account.

Peer-To-Peer Exchanges

Peer-to-peer exchanges like Paxful and LocalBitcoins pair individual buyers and sellers for trading cryptocurrencies. Here’s how to sell your bitcoin on peer-to-peer crypto exchanges:

  1. Choose a peer-to-peer crypto exchange.
  2. Register an account and finish the verification steps.
  3. Browse the bitcoin purchase offers page.
  4. Choose the offer that fits your needs.
  5. Verify the buyer’s profile and check their rating.
  6. Choose the buyer and discuss sale terms in the private chat.
  7. Send your bitcoins to the site’s escrow and wait for the buyer to send their payment.
  8. Complete the trade to receive the buyer’s payment.

Peer-to-peer transactions let you choose the best offer for your coin. However, you should watch out for fraudsters and scammers who might run away after receiving your bitcoin. To prevent scams, choose peer-to-peer digital currency exchanges with seller protection measures, like an escrow to hold your bitcoin while waiting for the buyer to pay.

Additionally, some peer-to-peer crypto exchanges offer in-person trades. The steps are similar to online crypto trades, only face-to-face.

Bitcoin ATMs

Bitcoin ATMs are kiosks where you can buy and sell bitcoin for fiat currency. The steps to selling bitcoins on an ATM are:

  1. Go to a Bitcoin ATM.
  2. Select the “sell” option.
  3. Input how much bitcoin to sell.
  4. Enter your phone number or sign up for an account.
  5. Scan the QR printout with your bitcoin wallet app.
  6. Wait for the transaction to finish.
  7. Scan your receipt to receive cash.

Bitcoin ATMs provide instant cash, but the high transaction fees may not be ideal. Bitcoin ATM kiosks are also not as widespread as bank ATM kiosks.

Things To Consider Before Selling Bitcoin

Everybody has different bitcoin investment strategies, so there’s no “perfect time” to sell. That said, consider these things before deciding to sell your bitcoin stock:

Bitcoin Value

The most important thing to do before selling bitcoin is to check its value. Sites like CoinMarketCap keep track of cryptocurrency price fluctuations, so you know whether bitcoin is falling or rising. 

Market value also changes over time. If you’re planning to sell during a price drop, you must be confident that the price won’t rebound soon.

Crypto Market Sentiment

Crypto market sentiment is the investors’ general attitude regarding the market. Market sentiments fall into two categories:

  • Bullish: Most investors feel positive about the market, so prices are rising. A bull market happened in July 2021 when bitcoin prices reached $40,000.
  • Bearish: Most investors feel negative about the market, so prices are dropping. January 2022 saw a major bear market when bitcoin fell under $38,600.

If you sell in a bull market, you’re more likely to earn a profit because prices are rising and people are buying more bitcoin.

Projected Profits

You don’t have to sell all your bitcoins at once. If you expect your holdings will increase in value, sell just a part of your stock to secure your gains.

Capital Gains Tax Rate

In some countries, long-term capital gains have lower tax rates than short-term earnings. Crypto earnings are considered long-term gains if you hold the coin for a full year. If you’re worried about high taxes, consider selling your bitcoins after you hit the one-year mark.

Conclusion

People sell bitcoins to secure profits, diversify investments, and cut losses. Depending on your needs, you can sell your bitcoin on crypto exchanges, peer-to-peer exchanges, and Bitcoin ATM kiosks. 

However, you need to consider the current bitcoin value, taxes, projected profits, and market sentiment to ensure you get the most out of your bitcoin sales.

FAQs

How do I sell other cryptocurrencies?

You can sell other cryptocurrencies like Ether and Cardano by trading them on crypto exchanges, just as you would with bitcoin.

What can I trade my bitcoins with?

Most crypto exchanges have numerous trading pairs that let you trade bitcoin for fiat currencies or other crypto coins.