Reasons Why You Might Want To Convert Bitcoin To Cash
While cryptocurrencies adoption rates are soaring and they are becoming more popular by the day, a lot of mainstream stores still dont accept them. The first reason as to why you might like to make the conversion might be to use your BTC to buy something at a merchant that doesnt accept Bitcoin.
Another might be to make use of the returns youve made from trading or hodling Bitcoin. Following the recent supercharged bull run, its understandable that many people are looking into cashing out their returns.
Lastly, you might be looking to protect yourself from a bear market. When the price declines, traders often look to move their funds into other more stable assets, like fiat or stablecoins for instance. Whatever your reason, were here to help and will run through various methods available to you as a trader.
Sign Up For A Cryptocurrency Exchange
The very first thing you need is to open an account with a crypto exchange. This is only applicable to folks that do not already own a cryptocurrency. In case you do, before choosing a crypto exchange, verify whether they accept Bitcoin from other mediums. You should go for an exchange that has a simple, user-friendly interface and would not bombard you with too much information at once.
Make A Cryptocurrency Account On A Selling Platform
You can use a platform like Coinbase or Binance. With the account you created, search for a market on which to buy and sell bitcoin , Ethereum , Litecoin , etc. Using your money, buy the amount of crypto you want to sell and transfer it into a personal wallet. To find out how much bitcoin or other cryptocurrency is worth in US dollars, visitCoinMarketCap.com.
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S To Trade Bitcoin For Beginners
When it comes to trading Bitcoin, there are many different approaches one can opt for. But regardless of the strategy one uses, the essential thing they need to do is understand the subject and acquire adequate knowledge. Understanding the associated risks and local laws that would be applied to you can be crucial in determining whether you would have a fruitful endeavor in Bitcoin trading or not.
Once you have done just that, you can follow the below-listed steps to set up your Bitcoin trading.
Can You Trade Bitcoin In The Us
Bitcoin is currently the most accessible of several cryptocurrencies. Bitcoin can be purchased through several platforms today, including exchanges, brokerages, crypto wallets, and even electronic wallets like PayPal.
The eToro brokerage platform is available to all residents. It is attractive to younger investors because of its simplicity, ease of use on mobile devices, and the ability to copy other traders. People feel more at ease when buying and selling complex assets more easily, such as Bitcoin. With eToro, there are no commission fees, so you get to keep more of your hard-earned money.
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
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Am I Concerned Or Excited About The Scarcity Of Bitcoin
The dance of supply and demand drives pricing for any investment. The total amount of bitcoins that can ever exist is 21 million.
You might not want to sell your bitcoins just yet because youre concerned about the possibility of not being able to repurchase it. Then again, perhaps youre like many HODLers who get a thrill out of its decentralized digital scarcity.
Its like having the key to an exclusive club, such as Club 33 at the Walt Disney World parks that has a waiting list of more than a decade to enter and costs thousands a year in membership fees.
Bitcoin Trading Resource Section
- Cointelligence Academy An A to Z trading course by Cointelligence and Mati Greenspan
- Algorithmic trading and technical analysis Everything about technical analysis and programming trading bots. No prior knowledge needed
- TradingView The most popular trading software around
- Coinigy Another Bitcoin trading software
The following sites are suited for Bitcoin trading:
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One: Choose A Crypto Trading Service Or Venue
The first step in buying bitcoin consists of choosing a crypto trading service or venue. Popular trading services and venues for purchasing cryptocurrencies are cryptocurrency exchanges, payment services, and brokerages. Out of these, cryptocurrency exchanges are the most convenient option since they offer a breadth of features and more cryptocurrencies for trading as compared to other places.
Signing up for a cryptocurrency exchange will enable you to buy, sell, and hold cryptocurrency. It is generally best practice to use an exchange that allows its users to withdraw crypto to their own personal online wallet for safekeeping. For those looking to trade Bitcoin or other cryptocurrencies, this feature may not matter.
There are many types of cryptocurrency exchanges. Because the Bitcoin ethos is about decentralization and individual sovereignty, some exchanges allow users to remain anonymous and do not require users to enter personal information. Such exchanges operate autonomously and are typically decentralized, which means they do not have a central point of control.
Although such systems can be used for nefarious activities, they are also used to provide services to the world’s unbanked population. For certain categories of peopleârefugees or those living in countries with little to no infrastructure for government credit or bankingâanonymous exchanges can help bring them into the mainstream economy.
Selling Bitcoin With The Bitcoincom Wallet
With this method, you can sell any amount of bitcoin in your digital wallet directly to cash, which will then be deposited in your bank account. Here’s how it works:
Note: it typically takes between 1-3 working days to receive the funds in your bank account.
How To Buy Bitcoin Cash
Buying BCH directly can be challenging.
When deciding how to get Bitcoin Cash most people will immediately go to an exchange. This generally involves exchanging fiat money for Bitcoin that you can then trade into Bitcoin Cash.
Here is a list of popular exchanges available in :
Bitcoin Cash Has Low Transaction Fees
The Bitcoin Cash blockchain operates with much larger blocks than Bitcoin. This means that more transactions can fit into each block, while on the original Bitcoin blockchain, block space is restricted and more scarce.
As a result, there is much less competition for users to get a transaction into the next block so theres no need to outbid each other with higher fees.
While Bitcoin transaction fees are now counted in dollars, Bitcoin Cash fees rarely cost more than 20 cents.
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How To Buy Bitcoin With A Credit Card
The process for purchasing Bitcoin with credit cards is similar to the one for buying the cryptocurrency with debit cards or through automated clearing house transfers. You will need to enter your credit card details with the exchange or online trading firm and authorize the transaction. In general, however, it is not a good idea to purchase bitcoin with credit cards. There are a couple of reasons for this.
First, not all exchanges allow bitcoin purchases using credit cards due to associated processing fees and the risk of fraud. Their decision to do so may work out in the best interests of customers. This is because credit card processing can tack additional charges onto such transactions. Thus, in addition to paying transaction fees, you will end up with processing fees that the exchange may pass onto you.
The second reason is that credit card purchases can be expensive. Credit card issuers treat bitcoin purchases as cash advances and charge hefty fees and interest rates on such advances. For example, American Express and Chase both count purchases of cryptocurrencies as cash advance transactions. Thus, if you purchase $100 worth of Bitcoin using an American Express card, you will pay $10 plus an annual percentage fee of 25%. What’s more, the credit card company also limits you to $1,000 worth of bitcoin purchases per month.
How Much Does It Cost To Buy Bitcoin Cash
Users can buy Bitcoin Cash through a social trading platform broker or a cryptocurrency exchange. Depending on the broker or exchange platform, rates and fees may vary, but sites like the Binance platform charge a 0.1% spot trading fee and 0.5% Instant Buy/Sell fee.
Other platforms such as eToro and Coinbase could charge higher spreads or crypto as well, and the commission fee varies. For the day traders out there who wish to buy Bitcoin Cash, you can look at day trading crypto exchanges to find the best for you.
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Is Any Exchange Safe To Store Bitcoin Cash
Even very reputable brokers like Coinbase are not immune to controversy, a number of accounts were hacked in 2014 as attackers abused the API of the Coinbase app in order to steal Bitcoins.
Risks Of Bitcoin Trading
1. Young Technology
The development of cryptocurrency is in its very early stages at this time. Bitcoin has been around for about ten years now, but it has not evolved into something truly solid. Due to all the changes in the market over the past few years, it is difficult to predict the markets future. Bitcoin may soon lose its meaning. Investors should approach this investment with caution and due diligence. Take steps to secure your funds in anticipation of the markets future.
2. Currency Or Investment Opportunity?
Cryptocurrencies have the potential to be powerful mediums of exchange online. Buyers, however, tend to use bitcoins as investments in the same way they buy stocks. Some consider bitcoin to be a good retirement investment. Nevertheless, investors face risks when there is no regulation, no physical collateral, and always shifting markets. Bitcoin may have potential benefits, but caution is recommended. It is better to invest in small amounts and take small steps.
3. Financial Loss
Bitcoin is sometimes referred to as a Ponzi scheme, where those at the top profit from the ignorance of others. As more people buy bitcoins, the bubble economy expands. When the bubble bursts, bitcoin will become worthless. Many people will hold onto cryptocurrency, hoping to sell it, but cannot do so because of the bubble. A very painful financial loss results from the investment, which does not yield a return.
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Best Practices For In
If you decide to meet up with another person then make sure to take some precautions.
Meet in a public area. Most trades will go through fine but a search on Google shows people getting robbed or scammed at in-person trades.
Bring a friend. If possible, try to bring along a friend or family member just so you’re not alone.
These tips are not meant to scare you and there is nothing wrong with trading bitcoins. But when dealing with any amount of money or trade it’s best to be safe.
Mistake #4 Giving Into Fear Or Greed
Two basic emotions tend to control the actions of many traders: fear and greed. Fear can appear in the form of prematurely closing your trade, because you read a disturbing news article, heard a rumor from a friend, or got scared by a sudden dip in the price .
The other major emotion, greed, is actually also based on fear: the fear of missing out. When you hear people telling you about the next big thing, or when market prices rise sharply, you dont want to miss out on all the action. So you may get into a trade too soon, or even delay closing an open trade.
Remember that in most cases, our emotions rule us. So never say, This wont happen to me. Be aware of your natural tendency towards fear and greed, and make sure to stick to the plan that was laid before you started the trade.
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Determine Why You Want To Receive Profits From Bitcoin
As a virtual asset, Bitcoin isnt money in the traditional sense. You could cash out your bitcoin, so to speak, by shopping online through a service such as Moon or Lolli, which accepts Bitcoin as currency. Thats a lot like spending a massive gift card at your favorite retailer.
However, if you want to get cash in handor your bank accountyoull need to convert your bitcoins into fiat currencies, or government-issued currency, such as the U.S. dollar.
Unlike cash based on commodities, fiat money is backed entirely by the complete faith and trust in the authorities that issued it. In some nations, such as the United States, fiat currency also is the legal tender. .
Before I outline how to do that, though, think about why you want to sell and cash out your bitcoins. Depending on your needs, one method might be more convenient than anotherand save you on taxes and fees.
Lets examine how to sell and cash out Bitcoin through each of these methods.
Compromises Made On Decentralization
While the developers and proponents of Bitcoin Cash have focused on transaction throughput and on-chain scaling, they seem to be less concerned about the peer-to-peer aspect of the protocol.
As a result, Bitcoin Cash has fewer miners and fewer network nodes.
Many believe that this poses a weakness to Bitcoin Cash that exposes it to be compromised or co-opted by special interests such as nation-states that may apply pressure for more identity to be attached to payments
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Getting Started: Before You Sell Bitcoin
To get started with bitcoin, youre going to need three things: an exchange, a wallet and the knowledge of how to buy the cryptocurrency. This last one is easy with our guide on how to buy bitcoin, but the other two are still important. The exchange allows you to buy bitcoin from sellers, and the wallet gives you somewhere to store it long term.
When choosing an exchange, you should look for one with many users, good customer support and low fees. Three particularly popular exchanges with newcomers are Coinbase, Robinhood and Binance. However, theres nothing really tying you to a specific exchange, so you can try new ones and quickly change at any time.
On the other hand, wallets can be much more complex. Cold wallets physical devices holding cryptocurrencies offline come with a steep up-front cost, but hot wallets pieces of software that hold your coins on a computer are often less secure. However, since hot wallets are fine for short-term storage and free to set up, its a good idea to start with them.
Do I Like The Novelty Of Owning Bitcoin
As an asset class, Bitcoin is a new kid on the block. Each time a speculative bubble occurs, funding drives the evolution of this technology and financial infrastructure. If youre comfortable with risk and got in on the ground floor or during one of Bitcoins previous ebbs in the market you might appreciate watching this cryptocurrency evolve, knowing that youre part of its community.
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Two: Connect Your Exchange To A Payment Option
After you have chosen an exchange, you will need to gather your personal documents. Depending on the exchange, these may include pictures of a driver’s license or Social Security number, as well as information about your employer and source of funds. The information you may need can depend on the region you live in and the laws within it. The process is largely the same as setting up a typical brokerage account.
After the exchange has verified your identity, you will be asked to connect a payment option. At most exchanges, you can connect your bank account directly or you can connect a debit or credit card. Although you can use a credit card to purchase cryptocurrency, it is not a good idea because cryptocurrency price volatility could inflate the overall cost of purchasing a coin.
Bitcoin is legal in the United States, but some banks may question or even stop deposits to crypto-related sites or exchanges. It is a good idea to check to make sure that your bank allows deposits at your chosen exchange.
There are varying fees for deposits via a bank account, debit, or credit card. Coinbase is a solid exchange for beginners and has a 1.49% fee for bank accounts, with a 3.99% fee for debit and credit cards. It is important to research the fees associated with each payment option to help choose an exchange or to choose which payment option works best for you.
How Do Centralized Bitcoin Exchanges Work
From a user’s perspective, the typical flow is as follows:
Make a trade by setting a ‘buy order.’
Buy and sell orders are aggregated into an ‘order book’ which is maintained by the exchange for the purpose of efficiently and automatically matching buyers and sellers. Most exchanges allow you to set both ‘market buy’ orders and ‘limit buy’ orders. When you create a market buy order, you only need to indicate how much bitcoin you’d like to buy . The exchange will automatically match you with the seller currently offering the lowest price, and execute your trade. Market orders are, by and large, instantly completed, meaning the moment you submit the order, you’ll receive your bitcoin in your exchange wallet/account. When you create a limit buy order, you’re indicating how much bitcoin you’d like to buy and the price you’re willing to pay for it. If and when there are sellers willing to accept the price you’ve set , your order will complete, meaning your bitcoin will show up in your exchange wallet and your money will disappear.
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