The greatest reason for people’s reluctance to invest in blockchain-based products is liquidity. In other words, it’s the fear that they won’t be able to convert their crypto profits into cash.
When it comes to prices and profitability, cryptocurrencies have remained painfully volatile. Still, crypto has grown into a highly regulated industry with plenty of marketplaces where you can cash out your crypto holdings anytime.
In this article, I’ll walk you through all the types of crypto providers where you can sell Bitcoin and other cryptos in exchange for U.S. Dollars. To make things clear, I’ll also provide you with a step-by-step guide on the selling process. I assure you it’s a pretty sleek process as long as you are on the right platform.
Why Should I Sell My Crypto for USD?
Cryptocurrencies circulate in a decentralized environment where transactions are executed free from central banks. When Bitcoin appeared in 2009, its main goal was to create an independent financial ecosystem that would eventually replace the traditional one.
In the years to come, thousands of other cryptocurrencies popped up on the scene. They differed from Bitcoin in many respects, but in one way or another, they all carried the idea of decentralization. And, despite the frequent and harsh falls, cryptocurrency has become a trillion-dollar worth industry, taking the role of mainstream investment instrument on a global scale.
Now, how is this relevant to the selling process?
Well, my point is that crypto assets weren’t envisioned to interact with fiat currencies. Take the Bitcoin whitepaper as an example. Satoshi Nakamoto describes Bitcoin as digital cash — a form of money that people will use for everyday shopping activities like buying a sandwich, for example.
Cryptocurrencies have grown more than everyone could imagine back then, but they never reached the status of a medium of exchange. It’s not that retailers don’t accept cryptocurrencies as a payment method at all. On the contrary, BTC and ETH can be seen as options in many virtual stores. Still, because of their poor scalability and regulatory incompatibility, cryptocurrencies can’t be accepted equally as USD or CAD across local outlets.
For that reason, even the most professional traders tend to cash out the profits made on crypto trading platforms or at least sell only part of it. You’ve read many success stories of fellow bitcoiners who’ve made a fortune. The catch is that the mansions and cars you see in the magazine photos aren’t bought in bitcoins. These top performers had to cash out their funds first.
How to Sell Bitcoin (BTC) or Cash Out Altcoins for USD
In this setup, centralized crypto exchanges (CEXs) play a key role. They serve as a bridge for all crypto-to-fiat transactions. That’s why CEXs come as the most reasonable destination for someone who wants to turn their crypto into cash.
Sell Crypto on a Cryptocurrency Exchange
Centralized cryptocurrency exchanges have contributed a great deal to the global acceptance of crypto in general. They operate just like any other interactive platform, and despite the vast diversity, crypto exchanges follow a similar pattern for buying and selling crypto against fiat currency or another digital asset.
On a fundamental level, CEXs run either a brokerage service or a trading platform. Crypto brokers are beginner-friendly platforms that enable you to buy/sell crypto on a retailer level, following a few single steps.
- Deposit the cryptocurrencies to the exchange from your external crypto wallet if you don’t keep them on your exchange wallet.
- Navigate to the Sell button and insert the type and the amount of Bitcoin or another crypto you want to sell and the fiat currency you want in return (USD, GBP, EUR, etc.). Locally-based exchanges usually support CAD withdrawals only, but if you insist on a USD settlement, you should opt for a global crypto broker like Coinbase.
- At this point, you should connect your exchange account with your bank account and select the most suitable payment option, depending on the local availability. Popular methods for fiat transfers include wire transfers, Interac eTransfer, ACH, SEPA, etc.
- Take a deep look at the fees. Crypto brokers of this calibre charge handsomely for ease of use. Sometimes the bank itself imposes an additional fee when dealing with a crypto-related transaction. Trading and withdrawal fees are transparently shown on the Sell panel and calculated in the Total section on most exchanges.
- Remember that digital currency exchanges operable in Canada must be FINTRAC-registered Money Service Businesses. This means that for deposits, withdrawals, and all other money-transmitting activities (especially when fiat is included), you need to undergo KYC (Know Your Customer) verification. This process requires you to upload government-issued documents and/or other supportive documents to prove your identity and permanent address of residence.
- Depending on the exchange policy and your bank, it may take days or even up to a week until you get the money delivered to your bank account.
Crypto Trading Platform
Real crypto exchanges appear in the form of order-based trading platforms where users place an order or respond to an order that has been already placed. So, in order to sell your bitcoins in exchange for USD, you should either place a market order for the BTC/USD trading pair or accept one with the same component assets.
Once you find a suitable buyer, the steps to follow are the same as those in the previous section. However, after completing the transaction and receiving your USD on your exchange account, you’ll need to initiate a Fiat Withdrawal to transfer them to your bank account.
Finally, remember that many popular crypto trading platforms only support crypto-to-crypto trading pairs. So, before transferring your crypto-to-sell on a particular platform, check their fiat policy.
Best Crypto Exchanges to Sell Cryptocurrencies
There are a few factors that determine whether a crypto exchange is a “good deal” for selling your crypto. First, of course, is liquidity. The exchange must be able to convert your crypto coins into USD. Deep liquidity also means a lower spread — the difference between the buying and the selling price.
Security and user protection are also a must when you convert crypto into fiat. Not only do you “give trust” to an entity to handle your money, but you also share a bunch of personal and bank information with the platform. Fortunately, today you can easily find whether your exchange has a clear history and whether it’s fully regulated in the local framework.
Next, consider the fees. When selling your crypto for fiat, there is a regular trading fee and withdrawal fee to count on. If transferring a large amount, check whether the exchange has a tier-based fee system, i.e. whether the fee percentage falls down as the trade size grows.
Processing times are also important, even though they greatly depend on the payment method. A reliable exchange always displays how much a withdrawal could take. Finally, you should never underestimate customer support in case your USD transfer gets stuck on its way to your bank account.
To illustrate, I gathered the withdrawal terms of the best cryptocurrency exchanges available across Canada.
|Crypto exchange||Trading fee||Withdrawalfee||Maximum daily limit||Processing times|
|Bitbuy (CAD only)||0-1.5%||1-1.5%||$10,000||Interac e-Transfer — 48 hoursElectronic Funds Transfer — 2 to 4 daysWire Transfer — 3 to 5 daysExpress Bank Transfer — 1 to 2 days|
|NDAX||0.2%||$4.99.||No max withdrawal limit||Wire transfer & Electronic Funds Transfer — one business day|
|Coinberry||Spread-based system||0%||Interac e-Transfer — $5000Wire Transfer — $100,000||Interac e-Transfer — instantaneous Wire transfer — 2-3 business days|
|Coinbase||0-0.50% per trade, 2.49% for credit card and debit card transactions||1%||$50,000||SEPA transfer — 1-2 business days|
|Binance||0.1%||$15||Depending on the KYC tier||Bank transfer (SWIFT) — 24 hours|
Alternative Methods to Sell Your Crypto for USD
Cryptocurrency exchanges are the most secure path to take when selling your crypto, but they’re not the only selling method. So, I listed all legit ways to cash out CAD or USD in the Canadian market.
OTC (Over-the-Counter) Desks
OTC desks are an extra functionality of well-established crypto exchanges that offer a personalized service for large-scale trades.
For example, if you want to sell 100 BTC, placing a market order on a regular exchange won’t be the most favourable solution. First, it isn’t very likely that your order will be executed at once as a single transaction. “Tearing up” your order into chunks will negatively affect the financial outcome because the exchange rate of BTC changes fast, and your order will be executed under a market price that is different from the initial one.
On the other hand, OTC brokers will guarantee the original execution price and won’t let your order get exposed on the exchange public order book. You’ll get a personal broker who will lead your way through the entire process — from transferring out your BTC from your external Bitcoin wallet to delivering the money to your bank account.
Bitcoin ATMs or BATMs are associated with crypto purchases but there are some models that allow you to instantly sell your Bitcoin or other market-dominant coins like Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Cardano (ADA), etc.
These machines are an ultimately convenient method for all supported crypto transactions. You get on-the-spot service and immediate guidance for the cashing-out process. Once you select the cash amount you want to receive, you’ll get a QR code containing the wallet address and the BTC amount you need to send in return.
For this operation, it’s best to store your BTC in a mobile app wallet so that you can easily scan the QR code. After this, the system will automatically fill in all information necessary to complete our transaction.
Apart from being extremely expensive, bear in mind that Bitcoin teller machines also have a strict verification policy and tight withdrawal range — from $3,000 to $9,000 per day.
Peer-to-Peer (P2P) Exchanges
P2P crypto exchanges like Paxful and LocalBitcoins used to be a big hit a few years ago as they presented a trading model where buyers and sellers could stay anonymous. P2P exchanges function rather differently from traditional crypto exchanges — they provide a platform where users can find each other based on the offer compatibility.
Once the buyer and the seller are connected, the exchange doesn’t get involved in the transaction process but lets users make the arrangement themselves. P2P exchanges use escrow services as a measure of protection for both users who sell and buy Bitcoin or another crypto. This approach has opened space for various payment methods — from traditional bank transfers to PayPal, Western Union, and even face-to-face transactions.
However, after falling under the strict KYC rules, P2P platforms seem to lose their luster in the crypto industry. They’re not as crowded markets as they used to be. Yet, a peer-to-peer platform can still be a lifesaver for selling your crypto if you insist on a particular payment method that can’t be found on your native CEX.
A Few Words Before You Go…
As you can see, selling various types of crypto is a streamlined activity thanks to entry-level exchanges that enable a sleek withdrawal process. This convenience seems pretty encouraging for the development of the entire crypto industry as the general public can easily translate the value of virtual assets into something tangible.
Finally, I can readily conclude that it isn’t a big deal nowadays to find a deeply-liquid exchange to cash out your bitcoins. The challenging part is to find an exchange where you can get a secure, cost-effective, and fast settlement into your preferred fiat currency.