Beginners Guide

A Beginner’s Guide To Selling Bitcoin Safely

Author: Qadir AK

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Author

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Bitcoin is and has been one of the most trending cryptocurrencies, and many people have gained profits by trading it.

Others are still finding a way into this massive ecosystem but do not understand how to navigate it. 

Do you relate to any of the situations below?

  • Some amount of Bitcoin was gifted to you by one of your close aides, friends, or family
  • You purchased bitcoin from somebody you know personally on a peer-to-peer basis
  • You were trying out an exchange and bought some amount of Bitcoin

However, now that you possess this valuable asset, you aren’t sure what to do with it, and you do not want to hold on for a longer time. Therefore, it’s time to sell! 

Coinpedia brings you an easy-to-follow guide on how to go about selling Bitcoin. Read on! 

How To Sell Bitcoin?

Exchanges

  • Exchanges are a good solution for trading Bitcoins. First, set up an account with a crypto exchange that is available in your country and is easy to understand. The majority of top exchanges ask for complete identity verification. Proceed by connecting a bank account to which you can withdraw your funds. If your Bitcoin is in a personal cold wallet, transfer it to the exchange’s wallet.
  • Go to the marketplace of your exchange. Place a ‘sell’ offer and provide the type of currency you wish to sell, the amount, and your asking price per unit. The exchange will help you complete the transaction once someone matches your offer.
  • After the transaction is done successfully, the funds are credited to your account. 

It is important to remember to check the fee you need to pay to use some exchanges, as this could come as a nasty surprise later on. Exchanges also have limitations, such as on the amount of money you can transfer, convert or store. 

Even if you are selling just a tiny amount of Bitcoin, you deserve to be protected with adequate safety measures taken by the exchange. The best widely used exchanges will be transparent about these limitations, fees, security measures, and policy changes, so be sure to read up on that.

To find the best exchanges refer to the Best Cryptocurrency exchanges

Direct Trades

  • Another way of selling Bitcoin is via direct trade with another person. This service is accessible on websites usually associated with exchanges and includes an intermediary facilitating the connection.
  • First, you will need to register as a seller. Apart from setting up your profile, you must verify your identity thoroughly. 
  • Once registered, you can post an offer indicating your intention to sell some Bitcoin. When a buyer wants to trade with you, you get a notification from the service, and from then on, you are only interacting with the buyer. The website merely serves as a platform to complete the trade.

Selling Bitcoin on some of these sites can be quite complex and time-consuming. Moreover, you might have to wait long before a buyer approaches you. So, it is essential to do your research before choosing a trading platform and make sure you have the time and patience required.

Some of the websites offering the option of direct trading are Coinbase and LocalBitcoins.

Online P2P trading

If you don’t have the patience to wait 3 days to turn Bitcoin into cash, you should consider using a peer-to-peer selling platform like LocalBitcoins. 

When selling Bitcoins to other people on some exchanges, you can tell the buyer which payment method you want to use.

You can arrange a meeting with the buyer who is local to you, and they will pay you in cash for your Bitcoins.

The peer-to-peer service is designed for the mutual benefit of people who want to buy Bitcoins with their credit cards and for others who want to spend their Bitcoins to buy goods from places that don’t accept digital currencies as a form of payment. 

As a result, the former gets their flat currency exchanged to BTC, while the latter can buy goods.

The websites help the users with an escrow service for the transaction and a wallet to store Bitcoins.

Here’s how it works:

  • John wants to purchase 1 Bitcoin. He is from the USA. He searches for sellers in his country and gets notified that Mike is selling 1 Bitcoin at a reasonable price. Fortunately, Mike accepts bank transfers as a payment option. John requests 1 Bitcoin from Mike, and Mike accepts.
  • Mike places his 1 Bitcoin into the escrow. The Bitcoin is held till John transfers the money to Mike. As soon John transfers the agreed amount into Mike’s bank account, Mike releases the Bitcoin from the escrow, which is then sent to John’s account.

All of the services mentioned above are online-based centralized platforms. To be able to sell Bitcoins using these services, you need to thoroughly verify your identification, which invalidates Bitcoin trading from its anonymity. 

Moreover, after you’ve managed to sell your BTCs, you need to withdraw them to your bank account or a bank card. This process will take a long time and will incur some fees. Hence, a lot of people go for offline trading.

P2P selling is safe. However, it’s essential to be aware of scamsters. Exchanges like LocalBitcoins offer an excellent level of safety because of their escrow service, which will keep your Bitcoins locked until you confirm the payment has been received from the buyer.

ATM

Bitcoin ATMs are not like the traditional ones. Unlike connecting to the user’s bank account, they are connected to the Internet to make Bitcoin transactions.

Bitcoin ATMs accept money in cash and exchange it for Bitcoins given as a paper receipt with a QR code on it or by moving the funds to a wallet on a Blockchain network. Usually, they charge very high transaction fees – some reports say fees are as high as seven percent.

Moreover, they are pretty challenging to locate. Most Bitcoin ATMs are marked on the Bitcoin ATM map.

Only a few Bitcoin ATMs offer two-way functionality, meaning users can buy and sell Bitcoins using them.

Sometimes, Bitcoin ATM providers ask users to have an existing account to conduct selling operations, and the registration process consumes a lot of time, energy, and effort.

For example, new users need to provide a telephone number for activation and notifications, a government-issued ID, a finger scan, and the latest photo taken by the ATM’s webcam.

Selling Bitcoin In Person

Trading digital currency in person is straightforward. To sell Bitcoin, you need to scan a QR code on another person’s phone and receive cash on the spot.

If you’re selling to friends or relatives, you need to set them up with a Bitcoin wallet, transfer them the necessary amount, and collect your cash.

However, if you are trading with a random person, you are likely to go through lengthy rounds of negotiations regarding the price, place of meeting, and other relevant conditions.

Pieces Of Advice For Staying Safe

Selling Bitcoin person-to-person is a good option for trading for those who need anonymity and convenience. However, it is imperative to check security, especially when trading with a stranger from the internet.

Foremost, you should carefully choose a place for the meeting. It needs to be a public place with active Internet access, as both of you should be able to access your online wallets. Going along with a friend to the meeting is also quite common in person-to-person trading, but notify the buyer prior to the meeting.

However, take the same precautions you would when carrying a large amount of cash.

When Should I Sell Bitcoin?

First, consider the ongoing market instability.

Read predictions or watch videos from leading analysts that will give you a fair idea of how and when you should sell BTC to get the best value. You certainly do not want to sell today and read about an explosion in the price tomorrow. 

Follow crypto experts on social sites, check crypto forums for more predictions, and learn from people who were patient enough and earned more than expected.

Also Read: The Ultimate Guide to Cryptocurrency Wallets

FAQ

How do beginners sell Bitcoin?

Beginners should sell bitcoin through Cryptocurrency exchanges, as it is easier for them to do so. Get a Wallet, Create an account on the exchange, choose an option to receive payment, and sell Bitcoin.

What is the cheapest way to sell Bitcoin?

Some of the biggest centralized Cryptocurrencies Exchanges charge very less transaction and exchange fees.

Is selling Bitcoin through exchanges safe?

Buying & Selling Bitcoin on platforms which are vetted and using a wallet to safeguard your Bitcoin is considered to be safe.

Well Done! You have now completed the Lesson.

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