A Guide to Exchanging Bitcoins

Despite being dubbed as the currency of the future, Bitcoin is still accepted by a considerably small number of retailers. The good news is, though, exchanging your Bitcoins for a fiat currency, or a traditional currency if you will, such as US dollar is relatively simple and hassle-free. If you are curious as to how much a bitcoin is valued at, you can do a quick google search to find out – though, admittedly, the worth of Bitcoin is in constant flux due to the volatile nature of the cryptocurrency market.

If you are interested in exchanging your bitcoins for US dollars, you can swap them using a virtual trading platform where you can look for prospective buyers. The virtual market is where you can conveniently exchange your bitcoins for dollars to then transfer the funds to your day-to-day bank account or virtual wallet.

Selecting a Bitcoin Exchange Platform

#1 Compare the value and prices of different exchange platforms

Regardless of the worth of bitcoin at any given time, every service offers varying exchange rates just like real-life currency exchange dealers.  You should do some comparison-shopping to get the best deal you can in exchange for your bitcoins even if this means a difference of a couple of hundred dollars.

#2 Choose a service with reasonable processing fees

Bitcoin exchange services usually attach a transaction fee for every exchange. While some platforms have a fixed fee regardless of the amount of the trade, others take out of a percentage of the total exchange amount. By comparing the processing fees of different exchange services, you can easily land on one that is the most economical in the long-run.

#3 Prioritize security

There are numerous ways to make sure that a bitcoin exchange platform you are signing up for has the necessary security measures in place to protect its users. One crucial step is to go through reliable sources to read up on reviews that confirm the safety and trustworthiness of a particular service. A secondary option is to check whether a platform operates on an HTTPS URL in lieu of an HTTP URL as the former is much safer. Lastly, choose an exchange platform that has a two-factor ID verification measure in place, which guarantees that you are the only person who can ultimately allow bitcoin exchanges to go through.

#4 Opt for a platform with fast processing times

Fast transactions are always preferable. So note that some platforms take up to 5 business days to deposit bitcoins into users’ accounts while there are some who can process exchange transactions within a few days.

Registration and Depositing Your Bitcoins

#5 Register for an account.

Creating an account typically requires you to offer some personal information such as your name, birthdate, email address, phone number, and so on. It is also likely you will be asked to give your personal banking information or the access information of an online payment platform you use such as PayPal.

#6 Choose the most reliable security options while creating your account

When you sign up for an account on a Bitcoin trading platform, you

typically have the option to turn on a safety measure known as two-factor verification, which involves inputting a password and entering a security code that you receive on your phone. If the platform your choice offers it, you should also turn the multisig feature on, which makes withdrawals and transactions without your permission much more difficult.

These two safety features are excellent protection measures against fraud, scams, and hacks, so take advantage of them if your platform offers the option.

#7 Upload your bitcoins

Depending on the way your bitcoins are stored, the system on which you upload your bitcoins differs. The process of depositing bitcoins is usually as straightforward as following the site’s menu and selecting the option to upload or deposit your coins. If you have your bitcoin encryption code, you’ll be asked to enter it. If you store your bitcoins in a virtual wallet, you will need to transfer the file. If you encounter any issues while making your deposit, feel free to contact customer assistance as they are usually happy to help you troubleshoot.

Exchanging Your Bitcoins

#8 Exchange your bitcoins when the rates are in your favor

Just like regular currency rates, bitcoin exchange rates fluctuate considerably. For example, you might be able to trade a bitcoin for $5000 one day, and two weeks later, the price might go up to $5300 per bitcoin. The whole process is unpredictable, so it is best to hold onto your bitcoins until you see an increase in the value of the dollar or for whichever currency you are looking to exchange your bitcoin.

#9 Trade your bitcoins on an exchange platform

Some exchanges allow users to exchange with others while there are some that offer users the option to sell bitcoins straight to the market to be resold to prospective buyers.  In both cases, the process through which users sell bitcoins may have some differences, which depends on the platform of their choice. However, a user can typically just choose “sell bitcoins” or a similar version on the menu of the trading platform to begin the process.

#10 Deposit bitcoins into your debit card

Some exchange platforms allow users to transfer bitcoins into a debit card that directly turns into dollars. While a standard debit card is entirely fine, obtaining a virtual debit card is also an option, which is very convenient for making purchases online.

#11 Store your bitcoins in an alternative online payment service/virtual wallet

A number of bitcoin exchange services provide users with the option to exchange bitcoins for dollars by storing them on online payment services such as PayPal. If you opt for this method, you need to set up your cash-out into the online bank account or virtual wallet of your choice.

Exchanging bitcoins to dollars by moving them into a virtual wallet typically results in more charges and suboptimal limits than merely moving bitcoins into your bank account. Though, this method could be more sensible for those who make purchases online frequently and don’t want to have to deal with all the transferring between accounts.

Featured Image: Depositphotos/© Jasastyle

Posted on May 5, 2023