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    How to sell Bitcoin (and other crypto)

    Wzllet with Bitcoin bursting out next to a pile of coins and a credit card

    Key Takeaways
    • Selling crypto involves choosing a platform, completing verification and receiving fiat in your bank account.
    • Options include centralized exchanges (CEX), crypto off-ramping apps, crypto-to-fiat swaps, peer-to-peer trading, brokerages and Bitcoin ATMs.
    • Each method has its pros and cons, affecting factors like fees, security and convenience.
    • Understanding Know Your Customer (KYC) processes is crucial for successful transactions.

    The total cryptocurrency market cap is above $2.3 trillion, based on CoinMarketCap’s statistics, highlighting the popularity of digital assets. Depending on your entry price, you may decide to sell your crypto. But how would you do it? Knowing how to sell Bitcoin and other cryptocurrencies may seem daunting, but it’s simpler than you might think. This guide breaks down everything you need to know about how to sell crypto. We’ll cover various methods, from using centralized exchanges to Bitcoin ATMs.

    A great resource to also consider is our guide on cryptocurrency trading platforms. Let’s get into it. 

    Selling Bitcoin step by step

    There are several ways to sell crypto for fiat currency. The overall steps remain similar whether using a centralized exchange (CEX), a broker, or a peer-to-peer (P2P) platform.

    1. Choose a selling platform

    First, decide where you want to sell your crypto. Options include centralized exchanges (like Coinbase or Binance), brokers, or P2P platforms like Binance.

    2. Complete KYC

    Most platforms require you to complete a Know Your Customer (KYC) process, an important compliance requirement. It involves verifying your identity with documents like a passport or driver’s license.

    3. Provide bank details

    Next, provide the platform with your bank details. Once you sell your crypto, you’ll receive your fiat currency in this account. Link your bank account correctly to avoid any delays or issues with the withdrawal.

    4. Send crypto to be sold

    Transfer the crypto amount you wish to sell to the platform’s wallet. Generate a deposit address on the platform and send your crypto from your wallet to the recipient’s address.

    5. Receive fiat to your bank

    Once you sell your crypto, the platform will convert it to fiat currency and transfer it to your linked bank account. Depending on the platform and your bank, the process takes a few minutes to several days.

    You can also use a Bitcoin ATM to sell Bitcoin. The Bitcoin withdrawal process is different,t but simple. You’ll find a Bitcoin ATM, scan a QR code and receive cash on the spot.

    1. Sell crypto on a CEX

    Ever used a stock exchange app like Robinhood? A CEX is the cryptocurrency equivalent. It’s a platform run by a company where you can buy, sell and trade cryptocurrencies with other users. Examples include popular CEX platforms like Binance, Coinbase or eToro.

    The following steps outline how to sell crypto on a CEX.

    • Sign up and complete identity verification (KYC). 
    • Transfer your crypto to the exchange wallet.
    • Sell your crypto for fiat currency.
    • Withdraw fiat to your bank account.

    Signing up for a CEX is like opening a digital bank for your crypto. When you create an account on a CEX, you provide personal information and go through a verification process, similar to opening a traditional bank account. Once your account is set up, you can deposit your crypto assets. 

    To sell your crypto, you can choose a quick sale at market price or set a specific price you want. The CEX finds a buyer and handles the trade, leaving your money in the account until you withdraw it.

    CEXs use the order book system to manage cryptocurrency trades. It lists all buy and sell orders with their quantities and prices. When you place an order, it’s added to the order book. When the system finds a matching order, it executes your trade. The order book model ensures liquidity by aggregating orders, making buying and selling cryptocurrency efficient. Liquidity in CEXs comes from buyers and sellers providing enough volume or orders for trades. 

    The advantages of selling on CEXs

    • Centralized exchanges are simple to use, making them accessible for beginners.
    • A large buyer and seller pool means plenty of liquidity and allows quick trade executions.
    • CEXs invest heavily in security measures, including two-factor authentication (2FA), encryption and cold storage for crypto assets.
    • Most CEXs support numerous cryptocurrencies, giving your selling flexibility. 

    Potential drawbacks of using CEXs

    • CEXs charge higher transaction fees, including trading fees, withdrawal fees and deposit fees.
    • Completing identity verification becomes a hurdle for those who value privacy and anonymity.
    • Because a central entity controls CEXs, they are more vulnerable to hacking, account freezing and regulatory scrutiny.
    • Expect potential withdrawal delays, especially during busy times or if we need to verify your information further.

    2. Crypto off-ramping apps

    Crypto off-ramping apps like Moon Pay provide a convenient way to sell Bitcoin and other cryptocurrencies. The platforms integrate with traditional financial systems, making it easy to convert your digital assets to fiat currency and withdraw to your bank account.

    How to sell crypto for cash with off-ramping apps

    • Identify an off-ramping app compatible with your chosen crypto asset
    • Download the app and create an account. This will normally involve KYC.
    • Link your bank account.
    • Transfer Bitcoin or whichever crypto you’re selling to the app.
    • Sell Bitcoin within the app.
    • Withdraw fiat to your bank account.

    Using an off-ramping app is straightforward: simply download the app, create an account, and link your bank account. Once that’s done, you can transfer your crypto to the app’s wallet and then sell it within its interface.  From here, you can easily sell crypto and receive the fiat straight to your bank. 

    Pros of crypto off-ramping apps

    • Off-ramping apps feature near-instant cash deposits directly to your bank account.
    • Many off-ramping apps don’t require account creation, giving you more control over your crypto and bypassing lengthy verification processes.
    • Various apps offer alternative withdrawal methods like gift cards or mobile top-ups.

    Cons of selling on off-ramping apps

    • Off-ramping apps are limited in terms of the cryptos they work with and the fiat currency they convert to. So, you may need to do some research to find one that can facilitate your swap.
    • Not all off-ramping apps connect to every bank or payment method. Be sure the app you choose works seamlessly with your preferred withdrawal option.
    • Now, while some off-ramping apps advertise lower fees than CEXs, factor in any hidden charges or margins on exchange rates.
    • Crypto off-ramping is a relatively new technology. While regulations are catching up, the industry remains dynamic, so choose a reputable app with a proven track record.

    3. Peer-to-peer trading

    Peer-to-peer (P2P) trading – sometimes known as crypto fiat swapping – allows you to sell Bitcoin directly to other users without intermediaries. Platforms like the Peach Bitcoin facilitate these transactions by connecting buyers and sellers. Peer-to-peer trading offers more privacy and often better rates compared to centralized exchanges.

    Below are the steps for peer-to-peer trading: 

    • Create an account on a P2P platform.
    • List your Bitcoin for sale with your desired price.
    • Select a buyer from the platform.
    • Agree on payment terms and receive payment.
    • Transfer Bitcoin to the buyer.

    P2P trading begins by creating an account on a trading platform. Once registered, you can list your Bitcoin for sale, setting your price and preferred payment method. Interested buyers will contact you, and you can choose the most suitable one. 

    You and the buyer settle on payment terms. To ensure a secure trade, you’ll use an escrow service. Here’s how it works: you transfer your Bitcoin to a temporary holding account controlled by the escrow service. Once the buyer’s payment clears, the escrow releases the Bitcoin to them. This safeguard protects you and the buyer throughout the transaction.

    The peer-to-peer trading advantages

    • Increased privacy with direct transactions between traders
    • Potential for more favorable exchange rates.
    • Increased privacy, since many P2P platforms don’t require KYC.
    • Flexible payment options.

    The peer-to-peer trading disadvantages

    • Increased need for caution and due diligence.
    • Transactions may take more time compared to automated systems.
    • Active involvement and careful negotiation are necessary.

    4. Crypto brokerage

    Crypto brokerages offer personalized services for buying and selling large amounts of cryptocurrency. An example is Coinbase, which provides advanced trading features and dedicated support.

    Here’s how to cash out Bitcoin using a crypto brokerage: 

    • Contact a brokerage and create an account.
    • Complete KYC verification.
    • Negotiate the sale terms.
    • Transfer your Bitcoin to the brokerage.
    • Receive fiat in your bank account.

    Using a crypto brokerage involves contacting the brokerage and setting up an account. You’ll need to complete KYC verification, negotiate sale terms with a broker and then transfer your Bitcoin to the brokerage’s wallet. After transaction processing, you’ll receive the fiat deposit in your bank account.

    Pros of Using a Crypto Brokerage

    • Personalized assistance for large transactions.
    • Enhanced safety measures.
    • Suitable for high-volume trades.

    Cons of Using a Crypto Brokerage

    • More expensive because of personalized services.
    • Unfavorable for small trades

    5. Use a Bitcoin ATM

    Bitcoin ATMs are physical kiosks that allow you to buy and sell Bitcoin for cash. You can find them in various locations, like malls and convenience stores. CoinFlip is a popular Bitcoin ATM withdrawal service provider.

    Here’s how to withdraw Bitcoin from a Bitcoin ATM: 

    • Locate a Bitcoin withdrawal ATM near you.
    • Select the option to sell Bitcoin.
    • Scan the QR code provided by the ATM.
    • Send the Bitcoin to the specified address.
    • Receive cash from the ATM.

    Using a Bitcoin ATM is straightforward. Find a nearby ATM and choose the option to sell Bitcoin. Scan the QR code provided by the machine and transfer the desired Bitcoin amount to the specified address. After completing the transaction, the ATM dispenses cash.

    Bitcoin ATM advantages

    • Receive cash instantly after the transaction.
    • Ideal for unbanked users.
    • Often found in easily accessible places.

    Bitcoin ATMs disadvantages

    • Transaction fees can be significantly higher than other methods.
    • Not as widespread as online platforms.
    • The ATMs may require identity verification.

    What is KYC in crypto? Why do I need to verify my ID?

    KYC is essential for crypto exchanges to verify your identity. This involves submitting documents like government IDs to comply with AML regulations and prevent illegal activities.

    Verifying your ID helps exchanges fight fraud, secure your account, operate legally and build trust within the crypto community.

    If you want more information, this Notabene guide is a great source.

    Should I sell my Bitcoin?

    Whether to sell your Bitcoin depends on your financial goals, market conditions, and personal circumstances. Evaluate factors like current Bitcoin prices, potential future growth, and your investment strategy. Selling during a market dip might lead to losses, while holding for long-term gains could be more profitable.

    Closing thoughts on selling crypto

    Deciding to sell cryptocurrency involves weighing the pros and cons. On the positive side, cryptocurrencies have a history of high returns and are highly liquid, allowing for quick selling. Additionally, they operate on decentralized networks, free from government control. However, these advantages come with significant drawbacks. Prices can swing wildly, leading to potential losses. Regulations surrounding crypto are also changing. The market itself carries high risk.

    Ultimately, the decision to sell depends on your individual circumstances, risk tolerance and market understanding.

    Disclaimer: The content in this article is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.

    Frequently asked questions

    Why must I verify my identity to sell crypto for fiat?

    Verifying your ID (KYC) is required to sell crypto for fiat (traditional currency) for two main reasons:

    1. Anti-money laundering (AML): It helps prevent criminals from using crypto for illegal activities like laundering money.
    2. Regulation: Financial institutions handling fiat transactions are required by law to verify customer identities

    What are the fees to sell Bitcoin and crypto?

    The fees for selling Bitcoin and other cryptocurrencies vary based on the platform used. Common fee structures include a percentage of the transaction amount or a flat fee per trade. Additionally, exchanges may charge network fees for blockchain transactions. 

    Fees can fluctuate based on market conditions and exchange policies. Before conducting transactions, it’s advisable to review the fee schedule of the specific platform you intend to use.

    How can I withdraw Bitcoin to a bank account?

    Select a reputable cryptocurrency exchange like Coinbase, Kraken, Binance, or Bitstamp to withdraw Bitcoin to a bank account. Create an account and complete the KYC process. Transfer your Bitcoin from your personal wallet to your exchange wallet. Sell the Bitcoin for fiat currency (e.g., USD, EUR) through the platform’s Sell or Trade function. 

    Once converted, initiate a withdrawal by selecting the fiat currency, entering your bank account details, specifying the amount, and confirming the transaction. Be mindful of associated fees, withdrawal limits, and the time it takes for the transfer to complete, which can vary by exchange and bank.