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How To Liquidate Cryptocurrency

How To Sell Bitcoin

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If you’ve decided to sell your coins, it is important to understand how exactly to go about the process. Selling Bitcoin is easier now than it ever has been, and is likely to become even easier in the future.

There are four main ways of going about this which will be discussed in some detail: exchanges, direct trades, selling BTC in-person, and via online P2P platforms.

Best Exchanges For Selling Cryptocurrency In 2022

Cryptocurrencies like Bitcoin, Ethereum, Ripple, Dogecoin, or Litecoin can be sold on several exchanges back to the original source you deposited with, or you can exchange them into stablecoins like Tether .

Selling cryptocurrency can pose quite a problem to people who havent tried to previously. As mentioned, it is quite profitable to learn how to dispose of your digital assets yourself without needing an intermediary aside from the broker that you are using. The basic advantage of this is you can avoid the risk of losing your digital assets along the way or being scammed by third parties. It is also important if you want to gain the actual value of your crypto without large fees that affect your profits.

Here are some of the best exchanges to use whenever you are looking to sell your cryptocurrency for fiat:

The brokers/exchanges above are some of the most popular in the cryptocurrency industry. They are prominent and indispensable for millions of investors that clamor for seamless trading as well as effortless selling. Primarily, they are structured in a way that appears friendly to novice traders and virtually everyone with an interest in digital assets.

Beyond these, the majority of the above exchanges offer several methods of crypto-to-fiat liquidity via banking integrations, credit/debit cards, and secured peer-to-peer services.

What Is The Best Way To Sell Cryptocurrency

There are several ways where you can sell cryptocurrencies. You can opt to sell them directly either online or in person, through Bitcoin ATMs, a brokerage, or through cryptocurrency exchanges. However, the best way to buy and sell cryptocurrencies is through crypto exchanges popularly known as crypto apps. The reason being is that they offer not only a good selection of digital currencies but also facilitate bitcoin transactions in the trade of digital assets. To use a cryptocurrency exchange, users will need to set up a cryptocurrency exchange account with the platform and connect to a bank account for withdrawing cash. In terms of accepting payment and payment options check out our article on how to accept crypto payments.

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Can I Spend My Cryptocurrencies Without Converting Them

A few years ago, various peer-to-peer exchanges noticed that people in China were spending Bitcoin to purchase iTunes gift cards from the United States. These gift cards allowed people in China to access western media on the iTunes store, a kind of loophole around the nations Great Firewall.

Where theres demand there will be a supply, and at the moment, Bitcoin is very much in demand. Whether youre shopping for Amazon gift cards or just topping up your Google Play balance, there are countless services available that let you trade your cryptocurrencies for platform-specific vouchers.

Store Your Crypto In A Safe Place

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While bigger exchanges are becoming safer, hacks and fraud remain a big problem for the industry. This is why investors with significant sums in Bitcoin are advised to consider storing their cryptocurrency themselves.

“Experienced traders that are very good with cybersecurity might prefer to own their wallets, as this gives you the ability to move your cryptocurrencies whenever you want to and not be subject to an exchange. The saying ‘Not your keys, not your coins’ was popular last year, as many exchanges got hacked or shut down,” says Moya.

This means transferring your Bitcoin from the exchange you use to your own cryptocurrency wallet. Such wallets come in two forms:

  • Cold wallets: also known as hardware wallets, these are small devices that store your Bitcoin address’ private key, which is necessary to transfer Bitcoin out of the address. They do not connect to the internet and are therefore considered safer than online, software-based alternatives.
  • Hot wallets: also known as software wallets, these are apps that can be used through your phone, desktop computer, or web browser. They also store the private key of your Bitcoin address, but because they do connect to the internet, they aren’t considered quite as safe as hardware/cold wallets.

Software wallets aren’t quite as secure as hardware wallets, but the leading varieties do still offer a range of security features, such as two-factor authentication and compatibility with hardware wallets.

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Cryptocurrency Liquidity: Liquidity In The Cryptocurrency Market

In the context of cryptocurrencies, liquidity can be broadly defined as the ability of a coin to be converted into cash or other coins easily without disrupting prices. A high liquidity is always preferred, since it is indicative of a vibrant and stable market. In a highly liquid market, participants can trade easily, quickly and at fair prices. A similar example is when you try to buy fresh produce at your local markets there is a higher tendency for you to shop at a bustling market with lots of sellers and buyers rather than a market with few market participants.

Lets take a look at the daily trading volume which is a measure of liquidity of cryptocurrencies as compared to traditional financial assets:

Due to the infancy of cryptocurrencies and its technology, the market is still considered illiquid since it is not ready to absorb large orders without changing the value of the coins. Illiquid markets tends to be highly volatile since anyone with a larger order can easily disrupt or worse, manipulate cryptocurrency prices.

How To Buy Bitcoin

Bitcoin is a cryptocurrency. This means it’s a form of electronic money that secures and validates transactions via the use of cryptography. In Bitcoin’s case, people and organizations known as “miners” use computing hardware to calculate a code known as a “hash” that encrypts the data contained in transactions. This data is collected into “blocks,” which are linked together in a blockchain that cannot, in theory, be changed once written.

On an economic level, Bitcoin’s creator the pseudonymous Satoshi Nakamoto created it in 2008 as a form of “sound money,” akin to digital gold.

“What makes Bitcoin so special is that it has a finite supply of 21 million coins, with only a couple million left to be mined,” explains Edward Moya, chief market strategist at OANDA’s. “Simple supply and demand for Bitcoin is the main reason why prices have skyrocketed over the past year.”

Despite having a fixed maximum supply, Bitcoin has shown remarkable volatility throughout most of its life with major fluctuations in its price.

Such swings make Bitcoin a highly speculative asset, one that should be considered only by traders willing to stomach a fair amount of risk. That said, at least some analysts suspect that its volatility will gradually decline over time, as its market grows and reduces its destabilizing reliance on leverage.

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How To Sell Bitcoin: 5 Ways To Cash Out’ Your Btc Holdings

How do you sell Bitcoin? is one of the first questions that arise when people become interested in buying cryptocurrencies, since getting your money out is just as important as investing.

Selling Bitcoin can be similar to buying Bitcoin, except in a somewhat reversed process. To sell BTC, you must first have BTC on hand in your wallet.

Buying Bitcoin is possible via a number of routes. When you are ready to sell some or all of your Bitcoin, you can do so through a variety of avenues, including an online cryptocurrency exchange, direct peer-to-peer transactions online or on-site, and through a Bitcoin ATM.

Make The Best Choices Of Crypto Brokers & Wallets

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Whether you like the idea or not, it is a fact that your brokers and the wallets you choose determine the safety of your funds in the cryptocurrency market. For instance, if you use an exchange that isnt secure enough, hackers could attack them and get to your assets the same goes for crypto-wallets. You should make good choices with the cryptocurrencies that you choose. These assets must have good use cases and have the potential for long-term growth. Compare platforms to sell or short cryptocurrency below:

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How Can I Avoid Getting Taxed On Crypto

The easiest way to defer or eliminate tax on your cryptocurrency investments is to buy inside of an IRA, 401-k, defined benefit, or other retirement plans. If you buy cryptocurrency inside of a traditional IRA, you will defer tax on the gains until you begin to take distributions…. continue reading

What Is Crypto Liquidation

Liquidation refers to the process of selling off crypto assets for cash to minimize losses, especially in the event of a market crash.

However, in the crypto space, the term liquidation is mainly used to describe the forced closing of a traders position due to the partial or total loss of the traders initial margin. This happens when they cannot meet the margin requirements for their leveraged position i.e., they have insufficient funds to keep the trade open. Margin requirements are often underfunded when theres a sudden drop in the underlying assets price.

When this happens, the exchange will automatically close out the position, resulting in a loss of funds for the investor. The severity of this loss will depend on the initial margin in place and how much the price drops. In some cases, it can lead to a total investment loss.

Liquidations can be categorized into partial and total liquidation. For example:

Partial liquidation: Liquidation that closes a position partially early on to reduce the position and leverage used by a trader.

Total liquidation: Closing a position nearly all of the initial margin of a trader has been used.

Liquidation can happen in both futures and spot trading. Though traders should be aware that when buying a contract, the price is derived from the asset instead of the asset itself. That translates to the fluctuation of the profit and loss when its converted back to the current assets price.

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Use Instant Sell On Web

If you need hard cash right now, you can use the Instant Sell option to get the real-world money on your credit or debit card as soon as possible. Just open the CEX.IO website in the browser that you use and log into your account. Next, go to the Sell page and enter the amount of ETH that you would like to sell. Choose the output currency. The amount of the output currency will calculate automatically.

Spot Price & Last Traded Price Dual

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The Spot Price, also called Mark Price, is an average price calculated from the price of several major exchanges.

Liquidation on Bybit happens when the Mark Price hits Liquidation Price. This means that the Last Traded Priceis not used as a trigger for Liquidation but, when a position is Liquidated, is used to calculate at which price the position closes.

This Dual-Price mechanism is used to prevent market manipulations as the market cap in cryptocurrency exchanges is still relatively small and thus, easier to be manipulated.

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How Does Crypto Liquidation Happen

Liquidation happens when an exchange or brokerage closes out a traders position because it can no longer meet margin requirements. Margin is the percentage of the total trade value that must be deposited with the broker to open and maintain a position.

When a traders margin account falls below a level previously agreed upon with the exchange, positions will automatically start liquidating. When your leveraged position reaches the liquidation threshold, youll face a margin call, which means you need to put up more margin. Liquidation tends to happen more often on futures contracts, where traders use higher amounts of leverage.

At that point, there are two options: Either you can add funds to your margin to bring your leverage back up above the leverage requirement, or the broker will automatically liquidate your position.

Continuing with our example of a $1,000 initial margin, lets say you entered a trade with 10x leverage, which means your leveraged position is now $10,000 that is, $1,000 of your own money and $9,000 which youve borrowed from the exchange.

Lets say your BTC slipped by 10%. Your position now is worth $9,000. Should the dip continue, and the positions losses increase, it would be applied to the borrowed funds. To avoid losses to the borrowed capital, the exchange would then liquidate your position to protect the money lent to you. Your position is closed and with it, your initial capital of $1,000 is lost.

A Final Word And Good Luck

There are plenty of opportunities where selling Bitcoin can be highly beneficial for all but they require great care and attention to detail in order to be most effective.

Did you find this information helpful? How have your experiences with selling Bitcoin been? Please leave a comment in the box below–we’d love to hear from you.

With the crypto craze in full swing and potential investors looking to put more and more money into the world of Bitcoin, there are a wide array of strategies to sell BTC tokens. Here is a detailed analysis of each one and how to best approach selling your coins.

Before beginning, it is important to understand that Bitcoin is a relatively new phenomenon. As such, taking care of all aspects of buying, storing, and selling your coins is vital. Additionally, due to the volatile nature of the currency, you should be extremely cautious when making investments and never risk more than a small percentage of your wealth.

That being said, because the currency is so volatile, it can be useful for both short and long-term investors. If one approaches this correctly, then the gains can be vast. While we do not offer investment advice, we will give a general overview of some of the methods and times when traders tend to sell their Bitcoins.

We know that this can be a confusing process. If there are any aspects of BTC selling that you feel have not been covered in this guide, let us know.

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When Should I Sell

The crash that came soon after Bitcoins peak in 2017 saw its effects spread out over the first half of the following year. Through ups and downs, BTC oscillated lower and lower, repeatedly testing the $6,000 support to no avail.

In just two weeks between mid-November and early December, Bitcoin plummeted to $3,500, inciting fear, uncertainty, and doubt into the minds of crypto investors worldwide. Of course, BTC would recover to over $12,000 by Q2 2019, but fearful traders could never have known this at the time.

No one can time the market perfectly, but its important to create a strategy for how youre going to profit from cryptocurrencies before fully diving in. A prepared investor is a calm investor, and only a relaxed mind can tame the unpredictable waves of cryptocurrency markets.

How To Use Liquidation To Buy Crypto At A Discount

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Liquidation is not only the price when the exchange closes the trade, but also an indicator that helps experienced traders to identify the best opportunities to open a trade.

With the cryptocurrency rising by 500-1000%, many traders, especially beginners, start to think they have some trading skills, rather than a growing crypto market helping them make money. They are starting to take more and more loans on the stock exchange. A $1,000 trader borrows 10 times more than his trading account and starts making big money until the market starts to fall.

This is where the most massive liquidations happen, when recent millionaires are left with modest deposits or no deposits at all. Fear is starting to prevail in the market, most are afraid to buy cryptocurrency. The Fear and Greed Indicator shows “Extreme Fear” during falls and large liquidations.You may have heard Warren Buffett’s famous quote: “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. This is exactly the moment.

In this picture you can see how to detect liquidations on the volume indicator. What is a volume indicator? This is an indicator that shows the number of buy and sell transactions. The higher the histogram, the more transactions and vice versa, the lower the histogram, the fewer transactions. The indicator itself is shown at the bottom of the picture as a histogram.

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How To Sell Ethereum

First of all, before selling ETH you need to make sure that you have them on your wallet. You can either use a cold storage or a hot storage. The cold storage is the one that is not connected to the Internet. This could be a piece of paper with a QR code on it. In this case, make sure you dont configure the public and private key. The private key should be kept secret and never be disclosed to anyone. However, those pieces of paper look practically the same so its fairly easy to confuse between the two. Just be careful and read whats written there. Next kind of the cold storage which is considered to be more popular is the hardware wallet. There are only a few brands that currently produce those and thus, most investors and traders know them for sure. You can read online reviews or watch videos of unpacking to decide which brand and model you like the most. Hardware wallets can be a little more difficult to use by the beginners. As a rule, they have a mobile app which is suited specifically for them.

Alternatively, you can have Ethereum on your balance in an online exchange like CEX.IO. There are quite a few ways to deposit your ETH and then use the services that you need whether youre planning to hold, trade, sell, request a loan, or maybe create a portfolio of stake-able coins and get some passive income over time.

  • Deposit fiat and then exchange to crypto.
  • Deposit ETH

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