Where and how to sell Bitcoin: everything you need to know
If you want to cash your Bitcoin in, here's how you do it
Have you bought Bitcoin? Are you thinking that now might be the time to cash in and sell your Bitcoin? After all if you bought Bitcoin a year ago you would have paid $3,428 (£2,644 or €3,115) for it. Now you could sell it for around $9,164, which is a pretty impressive return.
Before you make your mind up though it might be worth checking out our sibling site Capital.com. There you can use your Bitcoin to trade all kinds of financial options from shares in the world’s leading companies through to Forex and commodities without having to exchange your Bitcoin for fiat.
If you are however committed to selling your Bitcoin then there are several ways you can turn the digital coin into fiat. Here is our explanation of where and how to sell Bitcoin.
Bitcoin cash machines
Yes, just like ATM fiat cash machines, there are ‘holes in the wall’ which will dispense cash for your Bitcoins. The big advantage they have is that, in theory at least, you are receiving cash instantly. There is no waiting around.
There are of course drawbacks, and for most people this really isn't the best way to sell Bitcoin. The first hurdle you will have to overcome is finding one as they are not that common. If you are in a large city like London you should be fine as there are currently around 200 in operation in the UK’s capital. Admittedly a fair chunk of these are only set up to sell digital currencies, not to swap it for cash.
If you are outside the US, UK and Canada things get a lot more complex. Bitcoin ATMs are non-existent in some countries. In France, for example, there are just four and none in the capital Paris.
The second very major drawback is that they tend to charge a lot of interest to sellers, usually around 5-7 per cent but in some cases it goes as high as 15 per cent.
Also the process of using a machine isn't simply an analogue of getting fiat cash out using a bank card. Depending on the ATM you might need ID, or be required to have your photo taken. And even when the transaction is expedited you might not get cash instantly. You might get a redeem code that will need to be ratified before you get your fiat.
So unless you are desperate for the cash this is not an especially useful payment method.
Direct trade online
Another option is to sell your Bitcoin directly to another person online. Alas this is a lot more time consuming than it sounds. You will need to access a website to find a buyer and it will probably still involve a third party to facilitate the exchange.
Essentially you register as a seller on a site like BitBargain, Bittylicious, Coinbase or LocalBitcoin, which will involve some identification procedures. Then you announce your intention to sell and wait for a buyer to connect with you.
How long the process takes depends on how long you take to find a buyer, but this method does give you a degree of control over selling your Bitcoin.
Selling in person
This is in theory the easy option. To sell your Bitcoin you find a buyer, simply scan a QR code onto their phone and take their cash. This works very well if you know the person if, for example, they are a friend or a member of your family. It is when you start selling to people you don’t know that it can get more complex. Firstly, how do you find your buyer? There are a few ways such as using online forums. One very sensible route might be to find a local Bitcoin group and then make your transaction there.
Secondly can you trust the buyer? Carrying a lot of Bitcoin around has the same risks of having lots of cash. So be cautious, don't meet in people's homes, and preferably take someone with you.
We have left the way that most people sell Bitcoin until last, namely exchanges. They offer a straightforward way (and possibly the best way) to sell Bitcoin in a relatively secure and orderly fashion.
Firstly you choose an exchange, create an account and set up a digital wallet. There are many exchanges to choose from including; Binance, Coinbase, Bitstamp and Kraken. The process usually includes connecting a bank account and at the same time going through identification procedures. Once you have completed this you can offer your Bitcoin for sale stating what currency you wish to be recompensed in and what price you want for the Bitcoin. The exchange, which holds both your Bitcoin and the buyer’s cash, connects you and the transaction takes place automatically. The funds are transferred to either a bank account or a credit card.
Obviously the process is not free. Different exchanges charge varying fees for the transaction. Firstly there is a selling fee, which is usually around 0.1 per cent of the transaction. Then there is a fee to transfer the money. Invariably this is a further 0.1 per cent, though there are some exchanges that charge a flat fee. The price of the withdrawal can differ slightly if you are depositing the funds in a bank or transferring to a credit card.
If you do intend to cash in on your Bitcoin then exchanges are by some distance the most sensible option. Although it should be noted that even the biggest exchanges are not entirely secure. The world’s largest, Binance, was hacked in May 2019 with the thief stealing $40million of cryptocurrency.
Ultimately it's sensible to think very carefully before you sell your Bitcoin. Sure you can clearly make money selling Bitcoin (if you didn't buy it at the peak price of early 2018 that is). Also Bitcoin may have endured a bumpy ride in recent years, but it seems likely that it will rise in value as the months and years pass. Many crypto experts are convinced it will double in price in the next two years. If you want to make it work harder for you, look at https://exchange.currency.com/ for ways in which you can use Bitcoin to discover new investment opportunities.
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