How to Sell Bitcoin: Cashing Out Your Cryptocurrency

Whether you’re an experienced investor or new to Bitcoin, knowing how to sell is key to making smart decisions and getting the most out of your investment. Let’s break down the options to cash out your Bitcoin and what to remember so you can handle the process with confidence and clarity.

Is Bitcoin Overvalued or Undervalued?

Bitcoin’s price in December 2024 is $96,503. While the rise might grab attention, some experts question whether it’s overvalued. Other assets like gold are also climbing, and stocks are at a tricky point in the cycle. With Bitcoin often compared to digital gold, here are five ways to evaluate if the price makes sense.

Good as Gold?

J.P. Morgan compares Bitcoin to digital gold due to its limited supply, divisibility, lack of government control, and role as a store of value. Gold’s total market value is $15 trillion, with $3.3 trillion held by private investors, while Bitcoin’s market cap sits at $1.3 trillion. If Bitcoin has the same value as gold, its price could double.

Miner Detail

Analysts sometimes use the cost of mining an ounce of gold to estimate its price. A similar approach works for Bitcoin, mined using significant computing power. The cost of production depends on electricity prices, hardware efficiency, and how much miners are rewarded for their work. These rewards are designed to halve periodically, slowing supply growth until it eventually stops. The next halving is set for April.

This, along with new demand from ETFs, has Bitcoin bulls excited. Last year, Researcher Adam Hayes from Hebrew University predicted that mining a single Bitcoin after the halving could cost around $75,000. Farran from Finimize notes that production costs act as a price floor, not an accurate valuation.

Look at the US Dollar

As an alternative monetary system, Bitcoin must be evaluated alongside the current system: the US dollar. Several factors influence Bitcoin’s value:

Real interest rates
Money supply growth
Fiscal policy

Higher real interest rates and slower money supply growth reflect tighter monetary and fiscal policies. These conditions strengthen the dollar, making alternatives like Bitcoin less appealing to investors.

On the other hand, looser policies—like years of quantitative easing and stimulus—have weakened the dollar through low or negative real interest rates and rapid money supply growth. These conditions have historically been favourable for Bitcoin. Tight policies can hold Bitcoin back, while loose policies make it more attractive.

Measure the Conviction of Bitcoin Holders

A behavioural approach can help assess Bitcoin’s value by looking at the conviction of long-term vs short-term holders. Long-term holders usually increase during bear markets and decrease during bull markets. This pattern indicates that Bitcoin may be priced too high when short-term speculators hold more of the supply and too low when long-term holders dominate.

Swap Thing

Credit default swaps (CDS) are financial tools that pay out if a bond defaults. Despite the government’s ability to print money, there’s even a CDS market for U.S. Treasuries. This market suggests a small risk of default. The pricing from Treasury CDS can be used to estimate default probability.

How to Sell Bitcoin Directly

There are several ways to sell your Bitcoin directly:

Using a Bitcoin Wallet

Bitcoin Wallet apps let you store manage and sell Bitcoin directly to fiat currency. They’re simple to use and give you control over your funds. However, they don’t offer the advanced trading tools you’d find on cryptocurrency exchanges.

The steps to sell Bitcoin for fiat with a wallet app are easy. Open the app and make sure your Bitcoin is in the wallet. Select ‘sell,’ choose how much Bitcoin you want to sell, and confirm the transaction. The funds will then be transferred to your linked bank account.

Bank Transfer for Bitcoin

The easiest way to cash out Bitcoin is through a bank transfer. Cryptocurrency exchanges like Coinbase and Kraken let you transfer fiat currency directly to your bank account. Transaction fees and processing times vary—Coinbase charges around 1.5% for withdrawals, while Kraken’s fees depend on your location. Bank transfers use ACH, wire transfer, or SEPA to move your funds. It’s a simple and reliable way to access your money.

Converting Bitcoin to Cash Using P2P Platforms

Some centralised exchanges include a P2P portal, but platforms like LocalBitcoins and Paxful let you sell BTC directly to other users without needing a centralised exchange. Selling your crypto on a P2P platform is pretty simple. You just need to list your Bitcoin for sale after signing up and completing any required identity checks. Here’s how it works:

Finding buyers: Create an offer entering the amount of Bitcoin you’re selling, the price, and your preferred payment method. Buyers can browse offers and start a trade, or you can check buyer requests and agree to their terms.
Payment methods: P2P platforms support many payment options, including bank transfers, payments, mobile payments, gift cards, or cash in person. This flexibility makes them popular.
Escrow system: Once a buyer accepts your offer, the platform holds your Bitcoin in escrow while the buyer sends the payment. After you confirm the payment, you release the Bitcoin, you receive cash and the transaction is done.

Platforms for Selling Bitcoin

When it comes to selling Bitcoin, these platforms make the process simple and secure:

Coinbase: One of the largest cryptocurrency exchanges. It’s easy to use, works in many countries, and offers multiple payment options for selling Bitcoin.
Binance: Known for supporting a wide range of cryptocurrencies. You can quickly sell Bitcoin here and convert it to other crypto or fiat currencies.
Kraken: This is a trusted exchange where you can sell Bitcoin at competitive exchange rates and use helpful trading tools. Security is a top priority.
LocalBitcoins: Do you prefer peer-to-peer trading? LocalBitcoins connects buyers and sellers directly, offering flexibility with local or in-person transactions and plenty of payment choices.

Security and Timing for Selling Bitcoin

To sell your Bitcoin securely and efficiently, focus on timing and basic security steps.

Security Tips for Selling Crypto

When buying and selling cryptocurrency, security is paramount. Here’s a few tips:

Use a trusted exchange or platform.
Store your Bitcoin in a secure wallet and never share your private keys.
Turn on two-factor authentication (2FA) for extra security.
Watch out for phishing scams and avoid sharing sensitive info.
Only sell to trusted buyers or reputable exchanges.
Use a strong, unique password and don’t reuse it elsewhere.
Withdraw your funds as soon as the sale is done.
Keep your devices updated with the latest security patches.
Stay informed about market risks and conditions.

When to Sell Bitcoin

Bitcoin’s price is known for being unpredictable, and staying informed can help you plan better. Here are practical tips for deciding when to sell your Bitcoin:

Follow News and Events: Track updates that could impact Bitcoin’s price. Focus on meaningful updates, not just hype.
Stay Logical: Avoid emotional decisions. Use a reliable platform like the Brett App for an easy and quick sale.
Watch for Breakouts: Check for price movements past support or resistance levels. Breakouts can offer opportunities but come with risks—trade carefully.
Set a Buy-Limit Stop Order: Placing a buy-limit stop order slightly above resistance can help catch a breakout, but it’s essential to back this up with other signals.
Use Technical Indicators: Tools like Moving Averages, RSI, and MACD can help spot trends, overbought or oversold conditions, and entry points.
Stick to Your Plan: Create a trading plan based on your goals and risk tolerance, and use it to guide your decisions.

FAQs

Who owns the most Bitcoin?

Satoshi Nakamoto holds the most bitcoin, with about 1.1 million BTC. As the creator of Bitcoin and its first miner, Satoshi earned close to one million BTC through block rewards. These coins are stored across 20,000 addresses and have remained untouched, apart from a few test transactions.

How can I get the best price for Bitcoin?

To get the best Bitcoin price, check aggregators like CoinMarketCap or CoinGecko and compare rates on trusted exchanges like Binance, Coinbase, and Kraken. Watch out for fees, spreads, and withdrawal costs. Timing your purchase during periods of low market volatility can help you lock in better rates.

How long does it take to sell Bitcoin?

The time depends on your payout method, location, and off-ramp provider. Bank deposits usually take 3-5 business days to arrive in your account. Transfers to a debit card are generally available within 48 hours. Timelines can vary, so check with your provider for specific details.

Can I cash out Bitcoin through an ATM?

Bitcoin ATMs let you turn your Bitcoin into cash quickly. Unlike regular ATMs, they work differently. You scan a QR code on the machine, send your Bitcoin, wait a few minutes for the transaction, and then collect your cash. It’s a simple, no-fuss way to convert Bitcoin into physical money when needed.

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Jaden Boolkah

Hi, I'm Jaden Boolkah, a Senior Crypto Accountant with over seven years of experience in the crypto world. I started exploring cryptocurrencies early on, and my passion for numbers eventually led me to accountancy about five years ago. I love diving into the nuances of macroeconomics and global finances—it keeps me curious and continuously learning. My work is all about making taxes work for you, not against you, and I’m dedicated to handling your company’s finances in the most efficient way possible.