Amid the Bitcoin craze, you might be sitting over there, wondering, “how can I get in on all of this?” It’s important to put a wall up when someone tells you they have all the answers, but at Digital Trends, we put extensive research into everything we do.
This guide will help you better understand what Bitcoin is and how you can capitalize on this opportunity.
Step 1: Setup an exchange account
The simplest and most ‘automated’ way to turn your Bitcoin into hard cash is through an exchange platform. They act as a middle-man for the famously decentralized cryptocurrency by selling your Bitcoin for you. Since it’s one of the most popular and well established, we recommend Coinbase. If you would rather choose your own, there are many others to pick from, including popular international options like Bitstamp amd Bitfinex.
Signing up for an account there is easy, but there are some steps you’ll have to jump through. Depending on which country you’re in, you will have to comply with different forms of “Know Your Customer” rules, which may mean sending the site certain forms of ID. That can take a few days to process. Signing up to Coinbase Pro at the same time is also recommendable, though not strictly necessary, to give you greater control over your sale.
Once your account is created, link your bank account to it so that when you have made your trade you can get your cash out with as little hassle as possible.
Step 2: Transfer your Bitcoin to your exchange wallet
If you followed our guide on how to buy Bitcoin, you’ll have stored your Bitcoin in a secure — maybe even cold — wallet. To trade on Coinbase, you’ll want to send your Bitcoin to an exchange wallet and keep it there ready for sale.
Beginners can always use the Coinbase Wallet app, which makes connecting the wallet super simple as it automatically works with Coinbase trades. Just open the app and wait for the notification to “Connect Now” and enter your Coinbase login information. If you don’t see the notification, you can always go to Settings and choose Connect to Coinbase to get started. The Coinbase Wallet also has a few other handy features, including the ability to pay merchants directly from the wall if they are part of the Coinbase Commerce program.
Coinbase security is good, providing support for biometrics and advanced authentication technology. However, if you prefer to use another digital wallet, head to its settings and look for ways to connect to a currency exchange. You should be able to input your Coinbase login on most popular digital wallets and start an authentication process to connect it. However, this may take several days to complete, so it’s definitely not a last-minute step.
Step 3: Place a sell order and
With your exchange account set up, your bank account linked, and your Bitcoin deposited on the exchange, it’s time to actually make a sale. The latest version of Coinbase makes this very easy. Simply select Buy/Sell from the top menu and move to the Sell section. Choose Bitcoin as your currency of choice, and make sure the right destination is selected for your funds in the Deposit To section. If you have a bank account connected to your account, you will be able to select it here for a direct transfer.
Check your connected wallet to see how much Bitcoin you have, and choose the amount you want to sell. In 2018 Coinbase raised its default limits for trading and started allowing people to trade their cryptocurrency immediately after buying it, which is one reason we are fans of this particular service. You can see your weekly bank limit in the same section. Finally, choose if you want to repeat this sale, and if so at what frequency. Then select Sell Bitcoin. That’s it!
There will be a short holding period before the sale is complete. You can make as many sales during this time as you want, but the transfers won’t finish until their holding period is over.
As for deciding when to sell, well, that’s getting into a lot of investment advice, and there are many strategies based on your long-term plans and how much Bitcoin you want to move. Bitcoin has been going through a long period of devaluation and corrections lately, intermixed with slight recoveries. Some serious research may be required to decide when the best time to sell is for you.
If you’d rather have more of a hand in the actual sale process, direct trades (or peer-to-peer trades) are a possible alternative. You will need to register, which in some cases will mean confirming your identity, so as with all selling methods, we’d recommend getting your account set up well in advance of when you actually want to sell. Once you’re set up though, you can sell your Bitcoins in a much more ‘direct’ manner.
Unlike the exchanges, where the transactions are automated, you’ll need to perform the transaction in direct contact with the buyer. You set up a sell order for a specific value and when someone comes along looking to buy at the agreed upon price, the site will alert you that you can move ahead with the transaction. Once you give it the thumbs up, the buyer pays you, and you then send them the cryptocurrency in return.
The actual method of conducting the payment will very much depend on which platform you make the trade through. Sites like BitQuick keep things exclusively online, utilizing bank account transfers. However, sites like LocalBitcoin or Paxful have far more numerous options, including Moneygram, gift cards, cash in the mail, and even cash in person.
Although some of those methods are far more time consuming, many are much more anonymous and can allow you to keep your transaction away from prying eyes if that’s an advantage to you. If you do decide to do trades in person, make sure to do so in a public setting.
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