When you are thinking of investing in something, then thinking about how to sell it is as important as ways to buy it. That is a common mistake that many may among us often make. When they buy something in the hope of investing in it and then selling it later for a profit, they do not consider how they will sell it. The same is with cryptocurrency. Whenever you invest in cryptocurrency, always think, “What should you do for selling your Bitcoin?” to gain any profit from that investment.
Just like there is a proper process for buying Bitcoin, selling your Bitcoin is the reverse of this process. This article will explain some technical fundamentals for you, like how you sell your Bitcoin. And needless to say, for this, you should have Bitcoin in your digital wallet.
There are some different ways for this, and you can choose any of this depending on your preference. These options are online crypto-exchange platforms, direct person-to-person transactions either online or meeting physically, and via Bitcoin ATM.
Crypto Exchange Platforms
The complete advantages and disadvantages of cryptocurrency exchange platforms are yet to be discovered, but these cryptocurrency exchange platforms are a top solution for buying or selling Bitcoins among many Bitcoin holders. And if we talk about just selling any cryptocurrency, these exchanges hold the assets of sellers and buyers.
Now to question how do you use crypto exchange for selling your cryptocurrency? For this, you can choose any exchange platform according to your preference and make your account on that platform. Each exchange platform has a unique process for registration, and many creditable exchange platforms require the proper identification of customers to verify their accounts. These exchanges keep your cash in a separate bank account, and connection to that account is mandatory for cash withdrawal. Just like each country has its laws related to cryptocurrency, the rules and regulations of exchange platforms are also different. You should remain mindful of those rules. Even for the people of a specific region, these exchange platforms are banned.
After you open an account with the exchange platform of your choice, you’ll need to transfer your Bitcoin into that exchange account. Or maybe if you are registered with that exchange platform, you’ll already have your Bitcoin in that account. The next step is placing the sell order that contains the details and amount of your cryptocurrency and your demand price for one unit. It would be the responsibility of that exchange platform to match your offer with any buyer’s offer, and when it happens, the transaction will happen automatically. But as we know that handling cryptocurrency is a complex task. So, with a diverse range of order types, trading crypto through an exchange platform is extremely complex than the given process.
After you transfer your assets into the account, the next step is that you should withdraw the assets to the bank account connected to your exchange account. This process can take much more time than you can imagine, especially if that exchange platform has some trouble with the bank. As we know, most cryptocurrencies are highly liquid, so if they face liquidity at the time of transactions, transactions can also take a long time. When the Mt. Gox exchange went bankrupt, it was facing the same problems with money asset transactions. Another con to this is that there are a few banks, which just straightforwardly do not process any transactions of assets that are achieved through cryptocurrency trading.
Moreover, each exchange platform has a different withdrawal fee and a limit to the number of cash that you can withdraw at a single time. You should be aware of the withdrawal fee charged and the withdrawal limit by your exchange platform. Sometimes exchange platforms increase the limit on money withdrawal for their customers if the customer stays with that exchange for too long, or provide additional evidence of their identification to complete the security policies like Anti-Money Laundering (AML), Know Your Customer(KYC), of these exchange platforms.
Although these exchange platforms provide you with wallets for storing your funds in them, exchanges are not safe and secure places for keeping your money. There is always the possibility of being attacked by hackers. There were also cases where some exchange platforms frauded their customers by either mismanaging their funds or just disappearing with their money.
Another way you can sell your Bitcoin is by selling your cryptocurrency in a stablecoin that can obtain its regular price through collateralization. After that, you can withdraw your assets into a private wallet that does not belong to that exchange platform. You can keep your assets in that exchange platform, but remember that it would not be a safe option. But if it is necessary to keep some amount of money in your exchange account so that your account stays open, you can keep that specific amount of money in your exchange account and rest in the safe online wallet. Moreover, by doing so, you would have more authority over your assets.
The definition of stablecoin is that it is also a digital asset like cryptocurrency. Its value is like the peg-top of the asset’s value beneath it, which is usually fiat currency like rupee or dollar etc. Plenty of stablecoins are available for the exchange of BTC.
Another method by which you can sell your BTC with an exchange platform is by paying out your Bitcoin through a crypto-based payment card. Many types of these cards are available in the market. But to make use of crypto-focused cards, you’ll have to understand that how these cards work.
You can choose among multiple methods by which you can operate these cards, but mainly, the funds of customers are transformed into money at the time of sale. Because of that, the card could be used at multiple locations that also accept other conventional payment cards like credit cards or debit cards, etc. There are also some crypto-focused cards through which customers can stock their stablecoin onto the crypto-focused card. The benefit of doing so is that if the price of that cryptocurrency suffers from liquidity in the international market, it will not affect the currency you loaded onto the crypto-focused card.
Direct Trades of Bitcoin
The following method of selling Bitcoin is by trading it directly with someone. It can be done either face-to-face or online. There are multiple methods of doing so. You can meet the person with whom you want to sell your Bitcoin face-to-face, or you can do an online transaction through a designated platform.
Online person-to-person Selling
Many particularized platforms and some by-products of creditable cryptocurrency exchange platforms provide the opportunity for Selling and transacting Bitcoin. They act as a middle person between two parties who wish to swap Bitcoin for money or for money for Bitcoin. All this process is online, and these platforms arrange the online meeting of these parties.
The ways that these platforms work is the persons who want to buy Bitcoin post about their offer and demands like the desired price and desired payment option on this platform. Then the person or parties who wish to sell Bitcoin take a look at all the offer and select the one they prefer, and then the Bitcoin transaction happen according to the rules and regulations of that particular platform.
As we are well aware of the fact that in case of any online transaction, the safety and security of customers is crucial. For this reason, these platforms have an escrow function whose purpose is to provide protection for both buyer and seller. It also ensures the safe transfer of money and Bitcoin. Every buyer has a preferred payment option, and the seller agrees to that option while the deal is finalized. So, if the seller agrees to transfer money directly to his bank account, the funds will be sent to his bank account. And if the seller agrees to wire transfer, credit card or debit card etc., he will receive his cash by that method.
In-person transaction of Bitcoin
Another method of person-to-person transaction of Bitcoin is selling the Bitcoin by meeting them in person. Although the platforms that we discussed earlier arrange the online meeting of parting for the transaction, some people prefer to find the person they want to sell or buy Bitcoin by their own means. They can also meet the interested parties through their friends or relatives. But to do that, you’ll have to have complete knowledge of how to transfer Bitcoin or how to handle a cryptocurrency wallet and information about the platform you are using for keeping your assets. These are all the things that the platform must-do for you, but since you are making the exchange on your own, it is crucial that you know how to do all these things.
The price of Bitcoin is highly unstable like any other cryptocurrency and, it changes rapidly, so it is essential that you know the price of Bitcoin at the exact time of sale. The majority of traders use reputable exchange platforms for the latest Bitcoin rates. In addition to these exchange platforms, various other services are available for information regarding the latest rates of various cryptocurrencies.
Like we have stores in our country from where we can buy groceries and stuff, some countries have physical stores or shops like these form where customers can buy Bitcoin for cash, and Bitcoin holders can sell their Bitcoin for money.
An important thing that you must remember about Bitcoin is that across exchanges, the price of Bitcoin can vary, and different countries can have other costs of Bitcoin. This price difference is called “premium.” And if we talk about Bitcoin premium price, it is the quantity at which the Bitcoin trades above and below the market.
In South Korea, Bitcoin is traded at higher prices than the rest of the world, and this difference is labeled as “kimchi premium,” named after the most famous cuisine of South Korea.
If you are one of those traders who like to trade their Bitcoin assets by meeting with someone in person, you should remain aware of the risks that come with it. Because if you arrange a meeting with a person you have not known before, it could have many potential dangers like fraud, etc. there have been some cases where trading Bitcoin with strangers leads to financial risks for some people.
Bitcoin ATMs
Although this method for selling Bitcoin is “Bitcoin ATMs,” they are nothing like cash machines like the traditional ATMs. Just like traditional ATM machines are connected to the bank accounts of customers, Bitcoin ATMs are online for the convenience of customers for Bitcoin transactions.
Although understanding the complete structure of Bitcoin ATM is quite complex, the general method of using Bitcoin ATM is by scanning a given wallet QR code. After that, you can sell Bitcoin for money. These Bitcoin ATMs are available worldwide, and if you wish to use a Bitcoin ATM, you can find the location of the Bitcoin ATM near you through the internet. You must think that this method is relatively uncomplicated and straightforward than the rest of Bitcoin selling methods, but there is a significant con. They charge a high amount of money for each transaction. And additionally, not all Bitcoin ATMs offer both buying and selling of Bitcoin. While you are looking for the Bitcoin ATM for your Bitcoin transaction, always check which functionality they provide.
Another thing to consider is that some Bitcoin ATMs would require you to obtain an account for using their services, and the signing up process for that account can take a great amount of your time and energy. You would have to submit your telephone number to activate your account and messages, an identity card issued by the government, a scan of your hand, and a recent photograph clicked by the ATM’s camera. The process of activation of an account is different, and it depends on the ATM machine and its operator. However, identity verification is a must for using their services.
After you give enough verification of your identity to prove that you are not a fraud, you will receive a QR code along with your wallet address. You will have to transfer your Bitcoin assets to this address. You can receive the cash immediately from the ATM machine or be given a redemption code. In the case of the redemption code, the cash will be given to you after confirming the money transaction. This depends upon the type of machine you’re using. Moreover, sometimes a single confirmation is sufficient for you to get the cash, but in some cases, you’ll have to go through six confirmation processes to receive the money.
Every region has its own Anti Money Laundering (AML) and Know Your Customer (KYC) requirement policies and the Bitcoin ATMs have to adjust their settings according to them. These policies are essential for the safety of individuals using Bitcoin ATMs. For some countries, the installation of a Bitcoin ATM requires a money transmitter license, but there are also some countries in which there are laws that prohibit the installation of a Bitcoin ATM.
Withdrawing Funds
Along with the above-given methods of selling your Bitcoin, Withdrawing Funds is another method. In this method, you can sell your Bitcoin on a crypto exchange platform and then withdraw the cash you get by selling it into a bank account. There are two methods of doing it, which are given below.
- Wire transfer
- Automated Clearing House (ACH) transfer
Other methods of transferring the cash are through Single Euro Payment Area (SEPA). If you move the money through SEPA, it will be shared in the form of euros. The people of European countries mostly prefer this method. It was developed to create international transfer among the members of the European Union like Austria, Belgium, Bulgaria, Croatia, Cyprus, etc., more efficiently. Many cryptocurrency exchanges platforms located in European countries only accept this method of money transfer. You can select your cash transfer method according to your preference or the country from where you belong.
Up to this point, you must have noticed that not one method of selling Bitcoin is perfect. Similarly, these two methods of cash transfer have their pros and cons. The money transfer time varies, and it depends on the region and quantity of cash being transferred, but it usually takes quite some time. In some cases, it could take many days. And in addition to the time wasted, these methods can charge you for money transfers.
Some European banks can charge you if you want to transfer money through the SEPA method, and if you require an urgent transfer, the transaction fee can increase. Another thing to remember is that a few banks do not favor the transaction of money through the accounts connected with cryptocurrency exchanges, and you might face some hurdles in doing so.
Because of this reason, if you want to open an account, especially for money transactions from selling Bitcoin, you should think carefully and select a bank that allows this transaction from crypto exchanges.
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