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Selling bitcoin for the first time? Here’s what to do (and what to seriously avoid)
Selling off your Bitcoin holdings might sound simple, but it is actually a complicated process! If you really think that it is a 'click-and-done' thing, think again. It's not just about hitting the sell button and getting all the funds in your bank. Selling Bitcoin without caution can cost you a lot of your profits, or even result in you incurring unwanted surprise fees. You might even fall into a scam trap! There are certain do's and don'ts of Bitcoin selling that you must consider. Let's go through each.
First, know why you are selling.
Before selling your holdings, answering the basic question of why you are trying to sell your Bitcoin holdings is essential! What is the reason, is the market pumping and you want to cash in? Probably you are trying to buy something with fiat currency or you need funds urgently. Or probably, you are just curious of how selling works.
How much to sell and when to sell your Bitcoin is completely dependent on the reason for which you are considering this selling of Bitcoin. Are you just doing it for learning the process? Then try starting small! Always make sure that your goal is the main factor that guides your decision of selling your Bitcoins.
The do’s of selling
The first and a huge thing is to select the correct exchange, as a trusted platform is essential in ensuring a seamless selling process. Always opt for platforms that are protected, beginner-friendly and lets you sell your Bitcoin for other cryptocurrencies and fiat currencies. Besides, you have the option of withdrawing it straight to your bank account.
Abstain from using unknown apps, random sellers, or even shady social media buyers. The rate that such individuals offer says a lot about them. Someone offering more than the market rate means you are being scammed. Stay away!
Massive changes can take place in the price of Bitcoin within a fraction of a minute! You must know what to expect from the overall selling process and for that, you must always check the live rates and stay updated regarding it.
Besides, check the platform fees, which can be a flat fee, a percentage of the sale or a network fee. Check such fees, as this can sneak in on you and diminish your profits significantly.
Selling Bitcoin can attract taxes in some countries and you must know the taxes you need to pay in yours! You generally owe a part of your profit to the taxation system of your country when you sell a Bitcoin.
Start small when you are selling Bitcoin for the first time, as going all in is not a smart strategy at all. You must be completely aware of the process that is involved and with a small amount, the risks significantly reduce. When you start small, you gradually get a decent knowledge of how your exchange operates, without having to risk much and lose much.
Transfer of Bitcoin to your exchange wallet is essential, if you have stored it in your private wallet. In such scenarios, it is better to check the wallet address on which you are sending your coins twice. If you send to a wrong address, it means that you lose your Bitcoin forever. Moreover, mixing up addresses of different cryptocurrencies is a recipe of disaster! Make sure that you are sending to a Bitcoin address only.
The don’ts of selling
The first thing to avoid while selling Bitcoin is to rush the process. If you are moving too fast, you are at a greater risk of making a fatal mistake, like sending your coins to the wrong address or picking up the wrong sell order! These issues can cost you dearly, and therefore, it is important to review each step and take your time.
Never use public Wi-Fi, when you are logging into your exchange, transferring your Bitcoin or accessing your personal wallet! This might sound paranoid, but public networks are the hotspots of hackers, making it easier for them intercept data, steal passwords, and take your crypto, if they get access to your wallets. Always use private and protected networks.
You should never sell your Bitcoin holdings based on fear or hype, as this can be disastrous! When you hear a lot of noise, make a good call based on your own judgment. It is important for you to analyze your own goals, situation, and comfort and then sell your assets.
After selling and converting your Bitcoin to fiat or even stablecoin, letting it sit in the exchange for a long time than needed can be disastrous. You could lose access to your currency, in case there is an incident of hacking or even if the exchange freezes your account. As soon as you are done, transfer all your funds to your bank or personal account.
Before embarking on peer-to-peer selling, always be sure of what you are doing. Always stick to P2P systems that have an escrow system, ensuring that the Bitcoin is held safely until there is a confirmation of the transaction from both sides.
Bonus tips
Setting a limit order can be a beneficial way of ensuring that you earn the amount you want. The sale will only be executed when the price of Bitcoin hits a specific target that you have set. Besides, having an appropriate plan and sell strategy is also beneficial. This helps you make clear-headed and appropriate decisions and removes any sort of emotion from the selling process. Finally, always keep an eye on the market trends, news updates, and regulatory changes as they can also help you in making informed decisions.
Final thoughts
Even though selling your Bitcoins might seem to be a simple process on the surface, there are a lot of ifs and buts involved. Knowing when to sell your Bitcoin and why you are selling it off is an important thing that you must consider always. If you want to earn more profits, it is essential for you to ensure that you use a trusted platform, always move slowly double-check everything, and avoid emotions getting the better of you during decision-making!