By Michael Scott
Overview
Knowing how to cash out Bitcoin holdings is essential since it makes it possible for people to get the most out of a sale. Embracing the most suitable withdrawal method can make a difference.
This guide explains the major ways to sell Bitcoin and aids people in deciding the most suitable methods for them. Besides, it provides tips for secure and safe trading.
Direct Selling via Exchanges
Some of the easiest means to sell Bitcoin are centralized exchanges like Binance and Bitcoin. The first step of cashing out entails signing up for the exchange by completing some Know Your Customer (KYC) confirmation form.
After verification, a person should deposit their Bitcoin into the exchange wallet. Most platforms offer a vivid ‘Sell’ option for Bitcoin, where one can opt to sell at the market price or set their price.
After selling, a person will have fiat currency in their account. From there, they can withdraw the funds in various ways, including:
- Bank transfers: Many exchanges, such as Kraken and Coinbase, allow fiat transfers directly to a person’s bank. The method is straightforward, although processing times and fees vary.
- Debit card withdrawals: Exchanges such as Binance offer withdrawals directly to a debit card. Debit card platforms like Mastercard and Visa handle withdrawals.
- Third-party payment services: Exchanges primarily incorporate services such as SEPA or PayPal for users in specific regions. For instance, PayPal is popular for quick and low-cost withdrawals, but some platforms do not support it.
- P2P withdrawal: Platforms, such as Binance, offer a P2P service through which one can sell Bitcoin to other users for local fiat currencies.
P2P Platforms
Some centralized exchanges will provide a P2P portal, while dedicated platforms such as Paxful and LocalBitcoins allow the direct sale of Bitcoin to other users. This enables them to circumvent the need for a centralized exchange.
The Bitcoin selling process on a P2P platform is relatively easy. After signing up and completing the necessary identity confirmation, one can list their Bitcoin for sale using the following steps:
- Creating an offer stipulating the amount of Bitcoin being sold, the price, and the payment method.
- P2P platforms provide many payment methods, such as gift cards, bank transfers, and PayPal.
- After a buyer agrees to the offer, the platform locks Bitcoin into an escrow account while the purchaser sends the payment. The strategy safeguards both parties.
Bitcoin ATMs
The physical kiosks permit people to purchase or sell Bitcoin for cash. They are convenient if one prefers handling cash and avoiding conventional banking channels.
The process is simple: One should locate an ATM, scan their wallet QR code, send Bitcoin, and receive cash following the transaction confirmation.
A significant benefit of Bitcoin ATMs is convenience. One can acquire cash quickly without needing to wait for bank transfers.
Over-the-Counter Trading
OTC trading is the private, direct transactions between buyers and sellers. The deals happen off-exchange, making them appropriate for executing huge Bitcoin transactions while avoiding impact on market price.
A critical OTC trading benefit is the capability to sell considerable amounts of Bitcoin without leading to price slippage.
Selling Bitcoin for Goods and Services
Several websites and businesses accept Bitcoin for many services and goods. A major benefit of directly spending Bitcoin is evading the fees and hassle of changing it into fiat.
Transforming Bitcoin into Stablecoins
Stablecoins are pegged to the value of conventional assets. This makes their price remain relatively stable, resulting in them being an excellent alternative for dodging the unpredictability of Bitcoin without leaving the crypto market.
A major advantage of converting to stablecoins is that people can lock in their Bitcoin’s present value without fluctuations. For instance, if Bitcoin’s price falls, stablecoins will retain their value, offering flexibility to reenter the market when the price becomes more favourable.
Final Thoughts
When selling Bitcoin, a person must know about the tax implications. This is because they can differ considerably from one nation to another.