Sell Bitcoins on an Exchange

Bitcoin exchanges and outlets can be a very convenient way of selling bitcoins. These websites are online services that accept Bitcoin deposits and allow you to sell them, while charging a percentage fee on each trade. The downside is that most will require you to prove your identity and pay using a bank account or wire transfer.

Steps for Selling Bitcoins on an Exchange or Outlet

To sell bitcoins on most exchanges and outlets, you’ll need an email, a bank account, and some amount of bitcoins. Some exchanges may also require a scanned photo ID to be submitted, as well as documents that prove your current address.

1. Sign up for an account on a service’s website (see the list below). You’ll need to provide your email address and possibly your country of residence for this step. Note: you may not be able to sign up or trade if the service does not support your country of residence.

2. Provide personal information so that your identity can be verified. Most countries enforce anti-money laundering regulations (called AML/KYC in the United States) that require services to validate the identities of their customers before they can do business. The required information is usually your address, a scan of your photo ID, and possibly your national ID number.

3. Wait for your identity to be verified by the service. The service must check that your photo ID is not fake, and that your name isn’t on a list of terrorists and sanctioned individuals. They may also attempt to validate your address. Depending on the country and the service, the process can take anywhere from a few hours to a few weeks.

4. Setup a withdrawal method for the national currency you plan to sell your bitcoins for. The available withdrawal methods will depend on the exchange service and the country. They range from bank account cash withdrawal, wire transfer, ACH bank transfer, SEPA deposit, or check by mail. The service’s website should have detailed instructions on how to make a withdrawal or link your bank account to their service.

5. Deposit bitcoins with the service. The service should offer a unique bitcoin address for you to send bitcoins to (usually located on a “Funding” or “Deposit” section on the website). Usually within 1 hour after sending the bitcoins (the time it typically takes for 6 confirmations), they’ll be credited to your account and ready to be traded.

6. Place a sell order on the service’s website for the amount of bitcoins you want to get rid of and the price you’re willing to accept per bitcoin (a.k.a. a limit order). You could also place an order to sell a certain amount of bitcoins at the cheapest price available based on the current bids (a.k.a. a market order). Check the site’s order book for a complete list of the current bids.

   In either case, once a matching buy order(s) exists on the service’s order book, a trade will be automatically executed, and national currency will be credited to your account, and bitcoins will be deducted from your account. The service will also charge a small percentage fee based on the cost of the trade.

7. Withdraw your newly acquired national currency using the withdrawal method you previously setup.

Difference Between a Bitcoin Exchange and a Bitcoin Outlet

While exchanges and outlets may appear to do the same thing, the way they conduct transactions for their customers is different. Exchanges facilitate trades between buyers and sellers who place orders with the service. If a buyer’s order price meets a seller’s order price, the exchange trades the funds between the two people.

An outlet, on the other hand, sells bitcoins directly to customers from their own reserves that they’ve purchased themselves. If an outlet does not have enough bitcoin reserves on hand for an order, they may buy and sell bitcoins on behalf of their customers using exchanges (which may take additional time). Outlets typically charge higher fees than exchanges, but have a more simplified ordering process. Exchanges have more advanced ordering options, but the amount national currency available to buy bitcoins is limited to the bid orders other traders have placed.

Check out the list below for reputable Bitcoin exchanges and outlets.

tl;dr; Bitcoin exchanges match up people wanting to buy and sell bitcoins, and execute the transactions on their behalf. Bitcoin outlets sell bitcoins directly to you.

Advantages

• More convenient than meeting up to trade with a person face-to-face.

• Exchanges with a high volume of orders typically have the best prices.

Disadvantages

• You must trust the service not to steal your funds and to be solvent.

• Selling using an exchange or outlet service is not anonymous. Your identity can be linked to the bitcoins you’ve sold if the service’s records are ever leaked or subpoenaed by a government entity. Additionally, there will be a paper trail of withdrawals and deposits linked to your bank account.

• Exchanges and outlets charge fees on trades, and may also charge fees for deposits and withdrawals. Your bank may also charge additional fees for transferring money into and out of the service (i.e. wire transfer fees).

• Getting national currency into and out of the exchange or outlet can sometimes take a long time if the service is experiencing a high volume of deposits and withdrawals. This is normally due daily limits that banks place on the total amount of national currency transactions that the service is allowed to perform.

Some Advice

• Don’t keep a large amount of national currency or bitcoins deposited on an exchange or outlet. There is always a risk that the service may suddenly shut down, and your funds will no longer be available to you (see the MtGox debacle). Unless you’re a day trader or trying to profit from arbitrage opportunities, only deposit the necessary amount, and then withdraw your bitcoins after trade or purchase is complete.

• Only do business with a major exchange or outlet. Avoid services that do not list their physical location or are run by anonymous entities.

Major Bitcoin Exchanges and Outlets

The services below are some of the most trusted when it comes to trading and selling Bitcoin.

	“Forex meets Bitcoin Exchange”
Brother Bitcoin’s Rating	Kraken is the most technically advanced Bitcoin exchange with a large set of trading features, but has relatively low volume due to its newness. However, most customers in the US are restricted from trading on Kraken unless they live in a certain set of states (see disadvanteges below).
Type	Exchange
National Currencies	USD (no deposits) EUR KRW
Supported Countries	Most
Deposit methods	Bitcoin (1 hour) Altcoins: Litecoin (30 minutes), Dogecoin (20 minutes), Namecoin (60 minutes) Ven (1-10 days) SEPA (EU countries only, 1-5 days) Bank wire transfer (5-10 days) Ripple (instant)
Withdrawal methods	Bitcoin (1 hour) Altcoins: Litecoin (30 minutes), Dogecoin (20 minutes), Namecoin (60 minutes) Ven (1-10 days) SEPA (EU countries only, 1-5 days) Bank wire transfer (5-10 days) Ripple (instant)
Fees	Trades: varies by currency and volume Withdrawals: fixed 0.90 EUR per SEPA withdrawal, 5 – 40 EUR per bank wire transfer, depending on country
Verification Requirements	Verification is required to make any deposits/withdrawals Tier 1 ($1000 daily limit, $5000 weekly limit, can deposit/withdraw digital currencies only): name, date of birth, country of residence, phone number Tier 2 ($2000 daily limit, $10,000 weekly limit): address verification Tier 3 ($20,000 daily limit, $100,000 weekly limit): scan of government issued ID, scan of proof of residence, SSN (US only) Tier 4 ($100,000 daily limit, $500,000 weekly limit): businesses only, requires multiple incorporation documents
Physical Location	Calgary, Alberta, CA
Advantages	Polished website interface Advanced trading features and lots of help documentation Advanced security features such as PGP emails
Disadvantages	US customers must live in South Carolina, Montana, Alabama, New Mexico or Massachusetts in order to be verified and trade. Lack of direct USD deposits (wired USD funds must be exchanged to EUR by sending bank) Low volume Slow support response time

	“Trade Bitcoins with style”
Brother Bitcoin’s Rating	Bitstamp may Currently be the most popular Bitcoin exchange offering reliable customer service.
Type	Exchange
National Currencies	USD EUR (deposits only)
Supported Countries	Most
Deposit methods	Bitcoin (1 hour) SEPA (EU countries only, 1-3 days) Bank wire transfer (2-5 days) Ripple (instant) AstroPay
Withdrawal methods	Bitcoin (1 to 24 hours) SEPA (EU countries only, 2-3 days) Bank wire transfer (2-5 days) Ripple (instant)
Fees	Deposits: 0.1% fee for bank wire transfers (minimum fee of $15) Trades: 0.5% to 0.2% depending on your volume Withdrawals: fixed 0.90 EUR per SEPA withdrawal, 0.09% per bank wire transfer
Verification Requirements	Verification is required to make any deposits/withdrawals Scan of government issued ID: passport/national ID card/driver’s license Scan of proof of residency: bank statement/utility bill/tax return
Physical Location	Based in Slovenia but operates out of Reading, UK
Advantages	Relatively fast deposits and withdrawals High volume of orders and trades Attractive website design
Disadvantages	Sparse and limited help documentation Trading is limited to USD only

	“Bitcoin, safe and easy.”
Brother Bitcoin’s Rating	Coinbase may be the easiest way to buy a small amount of bitcoins, but without their “Instant Buy” feature enabled, the wait to receive them is at least 4 days.
Type	Outlet
National Currencies	USD
Supported Countries	United States
Deposit methods	Bitcoin (1 hour) ACH transfer via linked bank account (3-5 days) Visa credit cards (instant, but backup method for bank account only)
Withdrawal methods	Bitcoin (1 hour) ACH transfer via linked bank account (3-5 days)
Fees	1% + $0.15 per transaction
Verification Requirements	Level 1 ($3,000 weekly buy/sell limit): email, phone number, and US bank account Level 2 ($50,000 weekly buy/sell limit): complete a purchase and wait 30 days, address, date of birth, last 4 digits of SSN, and answers to identity verification questions based on the credit history of your SSN.
Physical Location	San Francisco, US
Advantages	Simple and polished interface with clear instructions makes it easy place orders. Reputable company with VC funding run by known members of the Bitcoin community.
Disadvantages	Purchases take 4 days to complete (unless “Instant Buy” is activated, which requires a credit card to be on file). Credit cards can only be used to buy bitcoins as a backup method in the event that a bank transfer fails.

	“The Virtual World Exchange”
Brother Bitcoin’s Rating	The primary draw of Virwox is the ability to purchase bitcoins with Paypal or a credit card by first purchasing Second Life Linden dollars then exchanging for bitcoins — but this method has high fees.
Type	Exchange
National Currencies	USD EUR GBP CHF
Supported Countries	Most
Deposit methods	Bitcoin (1 to 2 hours) PayPal (instant) Credit/Debit Cards (instant) Skrill/Moneybookers paysafecard Ukash SOFORTbanking
Withdrawal methods	Bitcoin (1 to 48 hours) PayPal (instant) Skrill/Moneybookers/Bank transfer
Fees	Deposits: depends on method, 3.5% to 20%, plus small fixed fee Trades: market orders are 2.9%, limit orders 0.78% to 3.9% depending on your volume Withdrawals: 0.002 BTC per bitcoin withdrawal, 1 EUR + 2% PayPal Fee per PayPal withdrawal, 1 EUR (1 USD, 1 CHF, 1 GBP) per Skrill/Bank transfer withdrawal
Verification Requirements	Paypal/Skrill deposit limits based on account age (no ID verification required) Level 0 (80 EUR per day, 240 EUR per month): available immediately Level 1 (120 EUR per day, 600 EUR per month): after 10 days Level 2 (200 EUR per day, 2,000 EUR per month): after 60 days Level 3 (300 EUR per day, 3,000 EUR per month): after 90 days Level 4 (8,000 EUR per day, 80,000 EUR per month): by request
Physical Location	Vienna, Austria
Advantages	Ability to buy Bitcoins with a credit card or Paypal by first purchasing Second Life Linden dollars and trading them for bitcoins No ID verification required
Disadvantages	High fees and restrictive trade volume limits Mediocre website interface