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How To Sell Bitcoin
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TABLE OF CONTENTS
Investor interest in Bitcoin has expanded globally since its inception. The digital asset has established itself as a reliable investment for traders seeking to protect themselves against inflation. Some investors buy Bitcoin as a hedge for inflation, while others invest to earn sizeable gains. In today's market, there are many ways to sell Bitcoin to make profits. This guide reviews how to sell Bitcoin to cash for low fees and safely.
Can You Sell Bitcoin?
Bitcoin is relatively easy to sell with a wide selection of exchanges and brokers available. The best crypto exchange to use allows the selling of Bitcoin into fiat currency off-ramp that can be withdrawn to a bank account. Once Bitcoin is converted to USD or another fiat currency, the cash-out process can be completed by selecting a payment method such as a bank transfer, card payment, or e-wallet services like PayPal account and Apple Pay to withdraw the funds.
How to Sell Bitcoin – Quick Tutorial
- Compare and select an exchange. Find an exchange that supports Bitcoin deposits and permits fiat currency cash withdrawals. A trusted and secure exchange to consider is Binance.
- Create an account. Register an account and complete the ID verification to enable Bitcoin to cash withdrawals and increase limits.
- Deposit Bitcoin. Fund the exchange by depositing Bitcoin using the unique wallet address or QR code.
- Sell Bitcoin to fiat. Choose a fiat currency pair (e.g. BTC/USD), enter the amount to sell, and confirm the BTC sell order.
- Withdraw funds. Once the BTC has been sold to cash, withdraw the funds by choosing the preferred payment option (e.g., bank transfer).
Where To Sell Bitcoin With Low Fees
We review some of the best crypto exchanges for traders to sell BTC. These exchanges were selected based on the platform's ease of use, features, fees, and liquidity.
Binance is the best-rated exchange to sell BTC for several reasons. It is the largest crypto platform by trading volume, available in more than 100 countries, which makes it highly accessible to individuals around the world. Its users can sell BTC directly for fiat via the trading exchange or a single ‘Convert' feature to quickly and safely swap between currencies.
Secondly, Binance is one of the cheapest exchanges, with a default 0.10% fee for transactions on the exchange. Once the Bitcoin has been converted to fiat, the user can then proceed to withdraw the swapped fiat to their bank account. What makes Binance stand out as the best place to sell Bitcoin is its ability to convert Bitcoin into fiat and stablecoins with zero fees.
Binance has removed trading fees for Bitcoin against 13 trading pairs which include BTC/USDT, BTC/BUSD, BTC/TUSD, BTC/USDC, BTC/USDP, BTC/RUB, BTC/EUR, BTC/TRY, BTC/AUD, BTC/GDP, BTC/BRL, BTC/BIDR, and BTC/UAH. This makes Binance the cheapest way to convert Bitcoin to cash using its no-fee trading platform.
Moreover, when it comes to payout methods, Binance supports credit/debits and even bank wire withdrawals. While card transactions can be processed within seconds, they often attract higher fees. Direct bank deposits often take a couple of days but cost less. For instance, UK investors can receive funds within 5 minutes and a 1.8% fee for debit card withdrawals. US investors can withdraw money using ACH via the Binance.US exchange. However, Australian investors may need to wait 1-2 business days to receive their withdrawals when using bank transfers in AUD.
An alternative route to sell BTC on Binance is the Peer-to-Peer (P2P) platform. This option enables investors to make direct trades with other Binance users using their preferred local currency, price, and payment method. A peer-to-peer transaction on Binance is completely free. Investors can sell BTC on its P2P service for fiat using any of its verified merchants, with the funds usually deposited within minutes, depending on how fast the merchant transfers the cash equivalent for the trade. Binance P2P gives sellers further flexibility with access to a wider selection of withdrawal methods, including debit cards, bank transfers, and e-wallet services like Advcash.
While Binance's user interface is more tailored toward experienced traders due to its advanced features. However, newbie traders who want to quickly convert Bitcoin to traditional money should find it straightforward to use the Binance Convert feature. Overall, Binance is the safest and cheapest place to sell BTC. For more information on the security and fees, read our full Binance review.
Coinbase is next on our list of the best exchanges to sell Bitcoin. The San Francisco-based crypto exchange is North America's largest crypto trading platform. Coinbase comes with an aesthetically pleasing platform that's perfect for crypto beginners. The user-friendly exchange only offers one way to reduce a Bitcoin position which is limited compared to Binance.
Investors can trade their BTC using the Sell option on the Coinbase website or mobile. The Sell option lets users exchange their BTC for their desired fiat currency, which can be withdrawn into their bank account. The advantage of using Coinbase is the user interface which is simple and easy to use on the desktop or mobile app to perform a sell trade.
The cost of selling Bitcoin on Coinbase is dependent on the order size. The exchange charges a flat fee on all Bitcoin sell orders up to $200. For instance, Coinbase charges Bitcoin traders $1.49 for transactions between $10 and $25. While BTC transactions within the range of $50 to $200 are charged a $2.99. There is also a spread fee of 0.5% to use the simple trade option to sell or convert Bitcoin to cash. However, when utilizing Advanced Trade, no spread is applied. This is because traders are interacting with the order book directly which results in competitive fees.
Another advantage of Coinbase is the broad selection of withdrawal choices. Bitcoin sellers can receive funds through preferred payment methods. The exchange supports withdrawals via debit cards, wire transfers, PayPal, Instant Cashout, and ACH transfers. For customers who choose the ACH option, their withdrawals will be processed within 3-5 business days. While wire transfers take about 1-3 business days to complete.
Overall, Coinbase is an ideal place for those looking to sell Bitcoins to cash. It features an extremely easy-to-use platform that is highly available with competitive fees and numerous withdrawal methods to cash out securely. To learn more about the exchange, read our full review on Coinbase.
Kraken is one of the top altcoin exchanges by trading volume like the options listed above. The San Francisco-based trading platform supports over 100 digital assets and can process transactions in large volumes. Moreover, Kraken makes it easy for crypto traders to part ways with Bitcoin securely given it is a regulated cryptocurrency platform by FinCEN to operate in the United States.
The exchange supports selling BTC using the ‘Spot’ feature. This would automatically swap the crypto asset to a quote currency – which is the second currency in a currency pair like USD or EUR. Once converted to fiat, Kraken users can withdraw the money to their bank account. Given its legal compliance in all countries Kraken operates in, Bitcoin can be converted into 8 fiat currencies which include the USD, GBP, EUR, JPY, AED, CAD, CHF and AUD.
Kraken offers fiat withdrawals for US and UK customers through ACH, SWIFT, FedWire, FPS (UK), and SEPA transfers. The fee charged depends on the withdrawal option chosen. When liquidating Bitcoin via the ‘Buy Crypto' widget, there is a 1.5% cost. This is a little on the high side compared to the other places to sell Bitcoin in this list. The alternative is to sell BTC for fiat on the exchange but this way comes with another fee depending on the withdrawal method.
For instance, there is a $4 withdrawal fee for both FedWire and SWIFT (Silvergate Bank). These transfers are processed within 1-5 business days. Withdrawing cash via ACH is also free and can be processed within 1-2 business days in the US. For Bitcoin investors that are looking for a reliable way to sell Bitcoin, Kraken offers good value with multiple options to convert BTC to fiat. Find out more in our full-length Kraken review.
Gate.io rounds off our list of best exchanges to cash Bitcoin holdings. Gate.io is a cryptocurrency exchange that supports several different cryptocurrencies and trading pairs. The exchange supports more than 13,000 assets. Like Binance, investors interested in selling BTC on Gate.io can do so through the P2P marketplace. This is advantageous if want to swap BTC directly for fiat deposits in their bank accounts. Moreover, Gate.io is a top provider in terms of trading volume at the time of writing.
To sell via P2P, users only need to access the marketplace and select a verified merchant from the list of options. Then insert how much BTC is to sell and fix a payment method to receive the equivalent fiat funds. The merchant would make the deposit and notify the user of the release of the crypto. Selling Bitcoin through P2P is generally free. It is also faster than going through the route of making a direct fiat withdrawal to the bank account.
New users may need to go through a learning curve using the Gate.io P2P service. While the platform is great for finding a specific Bitcoin selling method, it is not the most user-friendly use. Traders can sell their BTC and receive payments via a bank deposit or bank card from merchants.
Overall, Gate.io is one of the oldest and most trustworthy exchanges for cashing out of BTC. The only disadvantage is that US investors are not allowed on the platform. For more information on its features, pros, and cons, read our Gate.io review.
Other Ways To Sell Bitcoin
As the world's most popular cryptocurrency, traders wishing to sell Bitcoin to cash can do so via a variety of other methods besides a Bitcoin exchange. These are the most popular options available:
- Short Bitcoin. If you want to sell Bitcoin without liquidating its assets, short-selling Bitcoin is a great option. This involves using a margin or futures trading platform. Investors can hedge against price declines by selling Bitcoin using fiat or a stablecoin as collateral.
- Peer-to-Peer (P2P) platform. A popular way to sell Bitcoin to others without needing an intermediary. When a transaction is initiated, the selected platform holds the value or sum in question in escrow till other conditions of the sale are fulfilled. Once this is done, the stipulated sum is released minus the fees charged.
- Bitcoin ATM. Bitcoin ATMs may seem like typical cash machines, but they are not. A Bitcoin ATM is an autonomous device or kiosk that enables people to sell Bitcoin or other cryptocurrencies. There are currently over 38,000 Bitcoin ATMs spread across 79 countries. They are practical and viable solutions for consumers who wish to instantly convert Bitcoin without dealing with the hassles of a cryptocurrency exchange or a P2P platform.
- Spend Bitcoin. Another way to cash out of Bitcoin is to spend it. An example of a Bitcoin debit card is the Binance Visa debit card which allows Investors to pay for products and services. There can be fees to top-up a Bitcoin debit card but is a convenient way to convert Bitcoin to cash.
- Sell Bitcoin in person. This is possible for investors who have an acquaintance or colleague who intends to buy the asset and have cash in hand. By this, they can easily transfer the asset from a Bitcoin wallet to theirs in return for fiat currency.
What Are The Fees To Sell Bitcoin?
The fees incurred when selling Bitcoin depend on the method selected and the platform the investor uses. When using an exchange to sell BTC, the fees charged usually come at a flat rate. For instance, Binance is one of the most economical exchanges that charges 0.1% to sell Bitcoin and is an ideal platform for those who want to lower their crypto fees. Moreover, there are also fees to transfer Bitcoin between wallets and exchanges that should be considered.
The peer-to-peer (P2P) option is another affordable means of selling Bitcoin. The process entails a seller transferring the digital asset to escrow; then, the buyer makes payment. After the seller confirms the payment, they instruct the exchange to release the crypto in escrow to the buyer.
When is the Best Time to Sell Bitcoin?
Bitcoin trading is a high-risk investment as prices of digital currencies usually drop with little to no warning. However, when is the best time to sell Bitcoin? There is no one-size-fits-all in this scenario as the decision rests on many factors, such as:
- Bitcoin investment in profit. Bitcoin has had a wild ride since 2009, with the digital asset’s reign climaxing in November 2021 when it shot up to $69,000 per coin. In this case, the foremost cryptocurrency saw a remarkable increase of over 9 million percent from its 2009 record value of $10. Investors who bought Bitcoin at a significantly lower price can easily sell for a profit when its value increases. However, this goes both ways. If a person buys Bitcoin at a high value, all for it to see significant bearish action, that might be an ideal time to sell off to mitigate the losses incurred.
- Shrinking adoption. One of the key traits of a seasoned investor is when to close his position without mixing emotion in the decision. Bitcoin is a hugely popular cryptocurrency due to the values it epitomizes. Investors have piled on the asset due to its deflationary tendency. However, if the asset’s community continues to shrink or there is little to no development in the foreseeable future, it may be a great idea to cash out and move on.
- Something better comes along. The crypto market is seeing rapid developments, with new and more promising digital assets entering the crypto space. Many investors have sold their BTC holdings to buy altcoins they feel are more promising. For instance, several investors have sold their Bitcoins to buy popular non-fungible tokens (NFTs) collections like Bored Ape and CryptoPunks.
Do You Have to Pay Tax After Selling Bitcoin?
Selling Bitcoin can be taxable depending on the location of the investor. If they live in the US, the Internal Revenue Service (IRS) considers cryptocurrencies properties, so everyone who trades Bitcoin is liable to pay a capital gains tax based on their income bracket. This is according to a 2014 IRS definition paper.
The same scenario applies in the UK, where Bitcoin is grouped under the same umbrella as stocks and shares by His Majesty’s Revenue and Customs (HMRC). However, not all Bitcoin-related activities constitute what is called a ‘taxable event.'
How To Cash out of Bitcoin – Full Tutorial
1. Compare and select a Bitcoin exchange
The first step to take is to decide on the type of Bitcoin selling option that suits your preference. Users can either use a crypto-to-fiat centralized exchange, a decentralized exchange, or a Bitcoin ATM. However, the most popular option for selling Bitcoin is to use a central trading platform like Binance to convert crypto to regular fiat. To demonstrate, here is a full guide on how to sell Bitcoin on Binance.
2. Create an Account
Visit the official Binance website and tap on the ‘Register’ icon in the top right-hand corner. Next, choose between either ‘Signup with email or phone number’ or ‘Continue with Google or Apple’ depending on the device in use.
For our illustration, we would be working with the email option. To create a personal account, fill in a valid email address on the next page and add a unique, strong password. Follow through with the next steps and verify the mobile number.
3. Deposit Bitcoin (BTC)
Before selling Bitcoin, investors need to deposit BTC into their Binance accounts. Binance allows its users to fund their accounts with crypto from an external wallet or platform. To deposit Bitcoin, tap on the ‘Wallet’ icon and click on ‘Deposit.’ Select ‘Deposit Crypto’ and choose BTC from the list of options while selecting the network through which the deposit would be made. The Binance exchange supports the traditional Bitcoin network, BNB Beacon Chain (BEP2), BTC (SegWit) and ERC20 network.
Proceed to copy the wallet address and paste it on the recipient address bar of the external wallet. Confirm and click on ‘Send,’ and the crypto asset will be deposited into the Binance wallet once all verifications have been made on-chain.
4. Sell Bitcoin to fiat currency
Once the Bitcoin has been deposited into the Binance account, it can be converted to fiat. To do this, go to the ‘Trade' menu option and select ‘BTC’ with the preferred trading pair. For this tutorial, we would use the BTC/GBP pair.
Tap on ‘Trade’ from the list of options to open up the trading terminal. Then select between executing using ‘Limit’ or ‘Market’ orders. A limit order allows an investor to set the price to trade a coin, while a market order allows the user to sell at the current market price. Users should note that placing at-market trades to quickly convert Bitcoin to cash can incur higher fees.
Enter the desired quantity of BTC to swap for GBP and click on the ‘Sell BTC’ button to execute the trade. The equivalent amount would be converted to GBP and deposited in the ‘Fiat and Spot’ wallet. Going this route would see an investor incur 0.10% in trading fees.
An alternative is to use the ‘Convert’ tool' which comes with zero fees. All the user needs to do is locate the ‘Convert’ function, which is a drop-down menu at the far right corner of the exchange. Then select BTC as the asset to convert. Also, select a fiat-backed stablecoin and hit the ‘Preview Conversion’ button to execute the trade. The equivalent amount would be deposited in the ‘Spot Wallet.’
5. Withdraw funds to a bank account
Once sales have been completed, tap on the ‘Fiat and Spot’ icon and click on ‘Withdraw.’ Select a preferred payment method and follow the on-screen prompts. However, investors should consider the applicable charges before using one of the payment methods. For instance, Binance charges 3.9% for debit card withdrawals which is higher than other supported payment methods. Insert the amount of fiat to withdraw and click on ‘Confirm’ to complete the transaction.
Frequently Asked Questions
How can I sell my Bitcoin for cash?
Investors can sell BTC for cash by trading on a crypto exchange, P2P marketplace, or using a Bitcoin ATM. The latter is by far the easiest and fastest way of selling Bitcoins for cash, but, they are not widely available. Crypto exchanges are the most popular way to instantly cash out of BTC to a bank account.
Is it easy to sell Bitcoin?
Yes, selling Bitcoin is an easy task to do. The best method to cash out of Bitcoin is using a suitable crypto exchange. The process involves depositing BTC to the exchange, hitting the ‘Sell' button, choosing the payout method, entering the amount to sell and making a withdrawal to a bank account.
Who can sell Bitcoin?
Bitcoin holders that are 18 years and older can sell their BTC on a cryptocurrency exchange. They will need to complete a verification process to confirm their identity before selling Bitcoin to cash.
Is it legal to sell Bitcoin for cash?
Some countries have outrightly banned the use of Bitcoin for any financial activity. To hold or sell Bitcoin for cash in these regions (China, for example) may have severe consequences. But this is not the case in some countries like the US and UK, which supports crypto swaps to cash and charges income taxes on such trades.
How much does it cost to sell your Bitcoin?
The cost of selling Bitcoin depends on the platform chosen by a user. For instance, a direct P2P transfer would see a user only paying for the network fee to the miners. However, centralized exchanges like Binance charge a maximum of 0.1% for crypto sales and purchases.
Bitcoin trades are processed in the billions daily. While many investors are keen on purchasing the popular crypto, others also sell Bitcoin when they achieve a profit target or look to close their position due to a loss.
Our review has explored some of the best ways to turn Bitcoin into fiat to meet a user's immediate needs. Meanwhile, we recommend using the Binance exchange largely due to its deep liquidity to fill any sized orders and its low fees across the board.