How to Sell Bitcoin (BTC) in 2024
Knowing how to sell Bitcoin (BTC) is just as important as knowing how to buy it. When Bitcoin’s price is going up, holders need to know how to sell to lock in a profit. When the price of BTC is falling, holders need to be able to sell it to staunch their losses.
The good news is that selling Bitcoin is easy and there are multiple ways to do it. In this guide, we’ll cover 6 ways to sell Bitcoin and walk through the steps required to convert BTC to cash.
6 Ways to Sell Bitcoin
Bitcoin holders have a number of options when they want to sell their BTC. We’ll take a closer look at 6 of the most common ways to sell Bitcoins and the pros and cons of each.
How to Sell Bitcoin on a Crypto Exchange
The most common way to sell Bitcoin is by using a centralized crypto exchange such as Coinbase, Kraken, Binance, Gemini, and others. Many Bitcoin holders may already have an account with one of these exchanges since buying BTC at an exchange is the most common practices.
Selling Bitcoin on a centralized exchange is very easy. To start, users need to transfer their Bitcoin to the exchange using the deposit function. If you purchased your Bitcoin through an exchange and never transferred it somewhere else, you can simply log into your account to see your Bitcoin balance.
When you sell on a centralized exchange, you have the option of converting your Bitcoin to another cryptocurrency or receiving fiat. If you choose fiat, you can withdraw your money to your bank account. Just keep in mind you’ll need to verify your ID before you can move money out of the exchange.
- Very easy selling process
- Convert Bitcoin to fiat or another crypto
- Requires ID verification
- Higher selling fees than alternative methods
Read more: How to Sell Bitcoin
How to Sell BTC at a Traditional Stockbroker
A growing number of online stockbrokers now offer Bitcoin trading, allowing token holders to buy and sell BTC. Some popular brokers offering this option include Fidelity, eToro, Robinhood, Webull, and Interactive Brokers.
In order to sell Bitcoins at a stockbroker, you must have an account with the broker and transfer your Bitcoin there. This process usually requires talking with a broker’s customer service team, since many brokers don’t allow you to simply transfer funds from a crypto wallet into your brokerage account.
One major advantage to using a traditional stockbroker is that many charge zero transaction fees or commissions for selling Bitcoin. So, this approach can be much cheaper than using a crypto exchange.
- No commissions or transaction fees
- Can convert Bitcoin to fiat
- Requires ID verification
- Transfer process may take several days
Sell Bitcoin at an ATM
Bitcoin ATMs are best known as machines to buy Bitcoin with cash. But they can also be used to sell Bitcoin for dollars.
Bitcoin ATMs typically charge high fees, so this method is best only if you need cash in hand right away. If you can wait for a bank transfer, you’ll pay much less by using a crypto exchange or broker.
To sell Bitcoin at an ATM, you’ll need to find an ATM and then transfer BTC to the displayed wallet address. The ATM will give you cash on the spot for the value of your cryptocurrency. In most cases, you have to verify your ID in order to sell BTC at a Bitcoin ATM.
- Get cash instantly
- High transaction fees
- Requires ID verification
Trading Bitcoin for Another Cryptocurrency
Swapping Bitcoin for another cryptocurrency is a way to sell BTC while still remaining exposed to the crypto market. If you want to reduce your exposure but still remain ready to buy tokens at a moment’s notice, you can swap Bitcoin for a stablecoin such as Tether (USDT) or USD Coin (USDC).
You can trade Bitcoin for another crypto at any centralized or decentralized exchange. If you use a decentralized exchange, you won’t have to go through an ID verification step. There are also no transfer fees since you can connect your existing crypto wallet to the exchange to swap your tokens.
An important thing to note is that when you swap to another token, you must still realize profits on your Bitcoin for tax purposes.
- No transfer fees when using a decentralized exchange
- Can swap to a stablecoin to stay in the crypto market
- Results in taxable profits
- No way to get fiat from a decentralized exchange
Selling BTC on Peer-to-Peer (P2P) Trading Platforms
If you have a large quantity of Bitcoin, you may want to consider selling it on a peer-to-peer (P2P) trading platform. Most major exchanges offer P2P trading.
The advantage of P2P trading is that you can sell all of your Bitcoin as a single lot to an interested buyer. You get to set the price and the payment methods you’ll accept. You don’t have to worry about market fluctuations or liquidity issues when trying to move a large volume of Bitcoin onto the market.
The downside to P2P trading is that you typically need to price your Bitcoin under market value in order to find buyers. In addition, depending on what platform and payment method you use, you may need to verify your ID before selling your Bitcoin.
- No liquidity problems when selling large quantities of Bitcoin
- Choose your price and accepted payment methods
- Likely need to price your BTC below market value
- May require ID verification
How to Sell Bitcoin Through a Crypto Wallet
Many crypto wallets have built-in token swaps, enabling you to convert your Bitcoin to another token. The process is the same as for trading Bitcoin for another cryptocurrency at a decentralized exchange.
- Very convenient
- Can swap to stablecoins
- Can only swap for another cryptocurrency, not fiat
- Fees may be higher than at a decentralized exchange
Key Considerations Before Selling Bitcoin
Before you sell Bitcoin, there are a few important things to consider.
The Importance of Security
It’s essential to be vigilant about security when selling Bitcoin. Transferring funds or connecting your wallet to a third-party service can present an opportunity for scammers to steal your tokens if you’re not careful.
Thoroughly vet any service before connecting your crypto wallet or transferring Bitcoin. Make sure an exchange is legit and that you aren’t on a lookalike site run by scammers. No exchange or broker should ever ask for your private keys and you should never give them out.
Understanding Identity Verification Requirements
Crypto exchanges, brokers, and banks are required by law to verify customers’ identities before converting cryptocurrency to fiat. This ID verification requirement is designed to prevent money laundering using crypto.
ID verification is typically only required if you want to sell Bitcoins for fiat. If you want to swap Bitcoin for another cryptocurrency, including stablecoins, you likely won’t need to verify your identity.
Assessing Fees Associated with Bitcoin Sales
Most methods of selling Bitcoin entail fees. Here’s a breakdown of fees for different selling methods.
- Centralized exchanges: You’ll pay a transaction fee of 0.1% to 3.5% to sell your crypto for fiat. The fee is generally lower if you swap BTC for USD using the exchange’s trading platform and then withdraw your fiat.
- Stockbroker: Many stockbrokers allow you to sell Bitcoin commission-free.
- Bitcoin ATM: Bitcoin ATMs can charge fees of 10% to 20% when selling Bitcoin. They are much more expensive than using a crypto exchange.
- Decentralized exchanges: Decentralized exchanges typically charge low fees of around 0.1% to 0.5% to swap Bitcoin for another crypto.
- P2P platforms: P2P platforms often charge no transaction fees. However, you may have to price your Bitcoin below market value to make a sale.
- Crypto wallets: Crypto wallets typically charge fees of 0.1% to 0.5% for crypto swaps.
Step-by-Step Process of Selling Bitcoin
We’ll walk through the process of selling Bitcoin at a centralized crypto exchange since this is the most common method used.
Step 1: Create an Exchange Account
First, visit the exchange you wish to use and create an account. You’ll need to provide detailed information including your name, address, email, and phone number.
Step 2: Verify ID
Verify your ID by uploading a photo of your driver’s license or passport. You may also be asked to take a selfie.
Step 3: Transfer Bitcoin
Navigate to the deposits page and choose the option to transfer cryptocurrency from an existing wallet. Use your crypto wallet app to transfer your Bitcoin to your exchange account by following the on-screen instructions.
Step 4: Sell Bitcoin
Open the exchange’s trading platform and find the BTC/USD trading pair. Enter a market sell order to swap Bitcoin for USD. When ready, execute the transaction to sell your Bitcoin.
Step 5: Withdraw Funds
You now have USD in your exchange account. You can leave funds in your account or withdraw them to a bank account. To initiate a withdrawal, visit the withdrawals page and enter your bank account details.
Accounting for Taxes when Selling Bitcoin
When you sell Bitcoin for a profit, you are responsible for paying capital gains tax on that profit. You must pay crypto tax even if you swap Bitcoin for another cryptocurrency rather than selling it for fiat.
A growing number of crypto exchanges now report transactions to the IRS, so you’re likely to get caught if you don’t report profits from selling Bitcoin.
If you take a loss when you sell Bitcoin, you can use that loss to offset other gains from cryptocurrency trading.
How to Sell Bitcoin: Conclusion
Thanks to our guide, you now know how to sell cryptocurrency using 6 different ways. Most token holders choose to sell Bitcoin through a centralized exchange because it’s affordable and easy.
However, you may be able to get slightly lower fees by selling Bitcoin through a stockbroker. Remember that you’ll always need to verify your ID in order to sell Bitcoin for fiat, but not for converting Bitcoin to another cryptocurrency.
Read More: Why is Crypto Down Today?
Can I sell Bitcoin for cash?
You can sell Bitcoin for US dollars at a centralized crypto exchange, stockbroker, or Bitcoin ATM. If using a crypto exchange, sell Bitcoin using the BTC/USD trading pair, then withdraw your USD to a bank account.
Where can I sell Bitcoin?
You can sell Bitcoin for cash or another cryptocurrency at a centralized crypto exchange like Coinbase, Binance, Kraken, or Gemini. You can also sell Bitcoin at some stockbrokers or at a Bitcoin ATM. If you want to swap Bitcoin for another crypto, you can do that at a decentralized exchange.