— You can sell crypto to convert it back into fiat currencies, like US dollars or Euros – this is also known as “off-ramping”
— This can be interesting if you’re trying to take your profits, or simply need the cash
— Several options exist to sell your crypto, with the most common one being exchanges
— When using Ledger, you can sell your Bitcoin directly through Ledger Live with our partner Coinify
We talk a lot about how to buy crypto – but here, we’ll talk about the other side of the coin (pun intended). Here’s how to sell crypto, and why you might want to.
What does selling crypto mean?
Remember when you bought your first cryptocurrencies? You would spend your US dollars, Euros or other fiat currencies to get yourself your very first Bitcoin (or other crypto of choice). Buying crypto with money is the most common entry point into the world of cryptocurrencies.
So where there’s an entry point, there must also be an exit, right?
There sure is: you could sell your crypto assets. While with buying you’d convert your money into cryptocurrencies, selling crypto is the exact opposite. You would get Dollars, Euros, Yens etc. in return for your digital assets. It’s often referred to as off-ramping, or cashing out, since you’d be getting cash and getting rid of your cryptocurrencies. We’ll take a look at how you can do this later, but first:
Why would you want to sell your crypto?
There are different reasons why you might sell your crypto. Many believe that cryptocurrencies are the future of money, and are unlikely to sell their digital assets. So why would you?
Let’s go over some of the most common reasons for selling.
Taking Profits
Thanks to their quick price changes and the incredible growth they’ve seen over the last decade, cryptocurrencies are often seen as a great investment. Much like traditional investments like stocks, at some point you may want to reap the return on your investment.
Do take caution though: Investing in crypto can be risky – always do your own research on this.
Pre-emptive Action
Expecting the price of cryptocurrencies to plummet? Selling your digital assets for fiat currencies like the US Dollar is one way to minimize your exposure. Selling your crypto is not the only option for this – you could also consider swapping your crypto assets into stablecoins, for example – but it’s a legitimate course of action for savvy traders with reliable market alpha.
Paying the bills
While the future for crypto is looking bright, with more and more adoption being seen, it still cannot be used for everything. Paying rent, taxes and many other things cannot be done with cryptocurrencies yet. If you end up getting in a tight spot, selling your crypto might even be necessary.
How to Sell Crypto
So now that we got down what selling crypto is, and the reasons why you might want to opt for this, let’s get into the most important part: how to sell your crypto.
For this, you have a few options.
Sell Your Crypto on an Exchange
Probably the most common method, crypto exchanges are generally speaking pretty easy to use when it comes down to selling your crypto. Once you’ve created an account with your private info (name, address, copy of ID), you can send the cryptocurrencies you want to sell to their platform. Once your cryptocurrencies have arrived, you can proceed to selling them for fiat currencies like the US dollar or Euro.
When using exchanges, it’s probably best to send the exact amount you’d want to sell there. Cryptocurrencies sent to an exchange are in their control and they can limit what you can do with it. For example, if you send 10 Bitcoin to the platform and only end up selling 1 BTC, you can likely not withdraw the remaining 9 BTC from the exchange immediately. There’d probably be a withdrawal limit that’s lower than 9 BTC.
Direct Trading
Both of these platforms are there to facilitate trading between two individuals – let’s say John selling Bitcoin to Mary. A Direct Trading platform would serve as an intermediary in the trade, meaning they’d help conclude it. After having agreed on the trade they’d make, John would send his Bitcoin to the Direct Trading Platform, and Mary her Dollars as well. The platform would then make sure they each then get their Bitcoin and Dollars respectively.
On paper, these platforms seem like a pretty sweet deal. In practice though, they can be quite time consuming. Not only do you need to wait till you’d find a buyer, the actual processing of the trade can take some time too on certain platforms.
Crypto ATMs
Similar to your good old bank ATM, you can use cryptocurrency ATMs to withdraw cash directly. Only difference is that you are withdrawing this from your cryptocurrencies, rather than your bank account.
As you can imagine, it’s a nice, easy and quick way to convert your digital assets into fiat money. Unfortunately though, not that many crypto ATMs exist – they’re pretty rare. For most, you’ll need to travel pretty far to find one. A crypto ATM will likely be pretty limited in which crypto assets you can sell, as well as the amount you can withdraw.
This means that you can secure and control your crypto assets on your Ledger hardware wallet, while being able to sell your coins anytime you want through Ledger Live. It’s easily available to Ledger users, from a large number of countries.
The Ledger sell option, operated by Coinify, functions pretty similarly to the Ledger swap. You would send your amount of crypto securely through the Ledger sell to Coinify, after which they’ll send the promised amount of fiat money (US dollar, Euro etc) to the bank account you’ve indicated. Before doing so, you would choose the amount you want to sell, after which Coinify will indicate what you’d get in return for it. Of course, no crypto can be sold without your manual consent through your Ledger device.
Not only is it easily accessible, it’s easy to use as well with just a few button presses to be made. Most importantly: you’ll never need to sacrifice the ownership of your cryptocurrencies before you decide to sell them. It’ll stay in your hands up to the moment that you decide to sell your digital assets. And it’ll be kept secure through Ledger’s market-leading security solution.
Secure and Control Your Crypto – Seamlessly
Here’s our Chief Experience Officer, Ian Rogers, to explain exactly why it’s so important to secure your crypto – and why Ledger Nano is the safest option on the market.
If both apps are already installed, click on 'Buy/Sell' on the menu to the left. Then, click on 'Sell' at the top of the page. Click 'Choose a Crypto Asset' and select Bitcoin. Then, use the second drop-down to choose the accounts you wish to sell from, and click 'Continue'.
Even if you plan to hold onto your cryptocurrency long-term, you might think about selling your asset—or a piece of it—if its value has increased by two or three times the amount you paid. In this case, you can sell the same amount as your initial investment or between 5 and 10% of your entire stack.
The crypto market is very volatile. So, selling your crypto at the right time can be difficult. Still, the fundamentals apply, and generally speaking, you should look to sell your crypto under some specific circ*mstances.
The goal is to buy when the price of the crypto is low, ideally near the bottom. Then, wait for the next bull market, when market sentiment is high, investors are buying, and prices are increasing. At any time the price of crypto is higher than what you paid, you can sell for a profit.
Investing in crypto follows many of the same rules as investing in other markets. The most important rule is never to invest more than you can afford to lose. Safely storing your crypto in a hardware wallet is also important.
When you're selling a coin using a market order, your order may execute at the bid price, which is lower than the mark price. Cryptocurrency prices are volatile. To help protect your market orders against dramatic price moves, we adjust market orders to limit orders collared up to 1% for buys, and 5% for sells.
Cryptocurrencies are most commonly traded between 8am to 4pm in local time. While the crypto market is 24/7, your trades are more likely to be executed when there is the highest level of activity. Outside of these hours, when trading is lighter, it can be more difficult to open and close trades.
There was a local low in cryptocurrency prices last Thursday and Friday, making these days excellent times to purchase cryptocurrencies. In the best-case scenario, you should sell Bitcoin between Monday and Tuesday morning.
Cryptocurrencies like Bitcoin can experience daily (or even hourly) price volatility. As with any kind of investment, volatility may cause uncertainty, fear of missing out, or fear of participating at all. When prices are fluctuating, how do you know when to buy? In an ideal world, it's simple: buy low, sell high.
In fact, investing 5% of your portfolio in crypto is an often-quoted percentage of your net worth to tie up in crypto assets. Some experts recommend starting much lower, with just a 1% investment in cryptocurrency and the remaining 99% of your portfolio going to stocks and other traditional investments.
If you owned crypto for one year or less before selling it, you'll face higher rates — between 10% and 37%. If you owned the crypto for more than a year, your rates will be between 0% and 20%. Your total income for the year. The highest tax rates apply to those with the largest incomes.
What about withdrawal limits? In general, Coinbase does not limit how much crypto you can sell to your Coinbase cash balance (USD, GBP, EUR, etc). Withdrawing from Coinbase will be dependent on the payment method you are using to withdraw.
Thankfully, withdrawing crypto is often fairly painless, although the level of ease will vary depending on the platform that you use. To cash out Bitcoin, you'll first sell it using your preferred crypto exchange, a payment platform, or Bitcoin ATM. From there, you'll withdraw funds to your bank account.
Others Are Comfortable at 2-5% An increasing number of financial advisors and industry experts seems comfortable recommending a crypto allocation of somewhere between 2% and 5% of assets.
However, you still need to report your earnings to the IRS even if you earned less than $600, the company says. The IRS can also see your cryptocurrency activity when it subpoenas virtual trading platforms, Chandrasekera says.
Many of the golden rules of crypto investing center around the idea of minimizing risks. If you're going to buy crypto, the ideal scenario is that you benefit if crypto prices soar, but don't face financial disaster if the market collapses. These five rules will help you do just that.
People have different preferences depending on how much risk they're willing to take. However, most traders target at least 50% before they take profits. That being said, you can target 100% profits too before you decide to take. You can even target higher percentages.
Cryptocurrency gains value when demand rises higher than supply. The supply mechanism of a cryptocurrency is always known; each crypto publishes its token minting and burning plans. Some, such as Bitcoin, have a fixed maximum supply; we know that there will only ever be 21 million Bitcoins.
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A market's peak trading hours is typically 8 a.m. to 4 p.m. in its local time. These are the trading hours that usually drive the highest trade volume in each region.
To begin with, if a trader wants to increase the probability of making a profit, they may want to focus their buying on the October/November and April/May periods, which have historically posted the biggest average monthly returns for bitcoin.
The best day of the week to buy cryptocurrency is Monday when prices are the lowest. Sunday is the next best day of the week overall. After that, prices rise with Friday being the most expensive day to buy cryptocurrency.
According to crypto trading data, early morning seems to be one of the best times of the day to buy most cryptos. Like the day method, you can find out which day of the week your target crypto assets are at their lowest price so that you can buy them accordingly. Unlike the stock market, the crypto world is open 24/7.
Even though most buyers look at crypto as an investment, many aren't using the best investing strategy. The approach that has stood the test of time is investing for the long haul. Buy cryptocurrencies that you believe will increase in value, and hold on to them for at least three to five years.
Generally speaking, users' assets are exchanged into cash at the point of the sale, making the cards usable at locations that accept traditional payment cards. Alternatively, some cards allow users to load stablecoins onto a crypto-friendly card and not be subject to the volatility associated with cryptocurrencies.
Yes, Coinbase reports to the IRS. It sends Forms 1099-MISC to the IRS for U.S. traders who made more than $600 in crypto rewards or staking. $600 is the Coinbase IRS reporting threshold for tax year 2022.
If you are unable to sell or withdraw from Coinbase, it could be due to one of a few reasons: There are restrictions in your region. You are a new account holder. You haven't completed the verification.
Instead of cashing out your cryptocurrency, consider taking out a cryptocurrency loan. In general, loans are considered tax-free. If you need liquidity immediately, you should consider using your cryptocurrency as collateral to take a loan through a decentralized protocol.
For US customersThe Instant Card Cashout transaction fee of up to 1.5% of any transaction and a minimum fee of $0.55. The minimum cashout amount must be greater than the fee of $0.55.
Cryptocurrencies are most active during the work week, with prices starting low on Monday morning and steadily rising until they drop over the weekend. Pay attention to stock market trading hours as they have an effect on cryptocurrency trading, even though you can buy and sell cryptocurrencies 24/7.
We can confidently say that crypto will be around in five years. Sure, there will be many Web3 projects that won't survive, but the good ones will. Countless protocols and blockchain use cases are emerging every day, and the crypto space is continuously evolving, expanding, and growing at a higher rate each cycle.
Holding period. If you've recently purchased crypto via card, ACH or Open Banking, your crypto may be subject to a holding period. During a holding period, you cannot withdraw from your cash (GBP, EUR, or USD) account, send funds to your DeFi Wallet, or send to an external wallet.
Keeping your money in the bank and investing in cryptocurrency are polar opposites when it comes to risk and reward. Whereas bank savings accounts are FDIC-insured and stable in value, cryptocurrency investments have no guarantees and no intrinsic value backing them.
If you buy crypto and later sell it, any profits are taxed using the standard long-term and short-term capital gains rates (depending on whether you've held the crypto for less than a year or not) — the same rates used if you sell stocks.
The ACH bank transfer system typically takes 3-5 business days to complete after initiating a sell or withdrawal. Coinbase will deduct the balance from your source of funds and begin the bank transfer immediately.
You can diversify your crypto earnings by carrying out both mining and trading, thereby opening up multiple sources of crypto-based income. You can use your earnings from mining as capital to actively trade. In turn, you can also use profits from trading to upgrade mining equipment and pay for related costs.
Do I have to pay taxes if I sell crypto at a loss? Selling cryptocurrency at a loss can reduce your tax bill by offsetting capital gains from cryptocurrency, stocks, and other assets.
You must report income, gain, or loss from all taxable transactions involving virtual currency on your Federal income tax return for the taxable year of the transaction, regardless of the amount or whether you receive a payee statement or information return.
Going through an exchange is the quickest and easiest way to sell. This is because the cryptocurrency exchange does all the hard work of setting a good price and finding a random person looking to buy bitcoin for this price.
Most experienced crypto traders aim for at least 50% profit margin. You can aim for 100% profit margin, or even higher. If, for instance, your investment increases by 100%, it would be alluring to see where it goes. However, be aware that crypto market is volatile and if price climbs to new highs fast.
How long should you hold? Here's a specific rule to help boost your prospects for long-term stock investing success: Once your stock has broken out, take most of your profits when they reach 20% to 25%. If market conditions are choppy and decent gains are hard to come by, then you could exit the entire position.
Introduction: My name is Mr. See Jast, I am a open, jolly, gorgeous, courageous, inexpensive, friendly, homely person who loves writing and wants to share my knowledge and understanding with you.
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