Bitcoin has changed the lives of many through mining and trading. Many people buy Bitcoin, hold and sell after a while, mainly when market prices are soaring. The most popular way of selling Bitcoin is through centralised exchanges, but more people are trying to sell Bitcoin on P2P exchanges, and if that’s you, settle in.
Bitcoin is the biggest cryptocurrency by market cap. It has proven a viable means to earn from the cryptocurrency industry through buying and selling. Most investors buy Bitcoin to HODL. Anyone looking to sell is in dire need or trying to profit from a favourable market.
If you’re trying to sell your Bitcoin, we’re here to help you. If you’ve chosen to sell through a P2P platform, here’s a step-by-step guide on how to do it from start to finish.
What is a Peer-to-Peer Exchange?
Peer-to-peer exchanges, known as P2P exchanges, are platforms that facilitate digital trades directly between individuals using blockchain technology. The major appeal of these exchanges is the lack of intermediaries. Unlike custodial exchanges that trade for you, P2P exchanges let you make or accept offers for trades directly from other individuals.
Peer-to-peer exchanges offer services such as direct cryptocurrency trading, NFTs and gift cards.
Compared to traditional exchanges, P2P exchanges have lower transaction fees and offer privacy to their users. They offer control and privacy during transactions.
How Does a P2P Exchange Work?
Peer-to-peer (P2P) exchanges work with blockchain technology. This technology creates an automated transaction system wherein users create buy/sell offers that other users accept if they match their needs. When a user makes or accepts an offer, a transaction takes place. The assets to be exchanged are held in an escrow. This escrow is part of the provisions of blockchain technology, and it keeps transactions transparent and secure.
Pros
- P2P exchanges are secure.
- They are more private than traditional centralised exchanges.
- The fees are less than those of regular exchanges.
- P2P platforms provide a balance to group trading and decentralisation.
- No need for an intermediary
Cons
- They are more prone to scams. There’s only so much these platforms can do to verify the authenticity of every user’s offer.
- P2P exchanges are lacking in liquidity, and this is due to the limited number of users.
Examples of P2P exchanges
- Binance
- Prestmit
- Paxful
- Kucoin
How to Sell Bitcoin on P2P Exchanges
Follow these steps to sell your Bitcoin on a P2P exchange
1. Pick a P2P exchange.
Different P2P exchanges offer various services. Some provide instant trading with fiat currencies or gift cards like Prestmit. Others like Paxful allow users to trade multiple cryptocurrencies. Ensure you pick one that suits your needs. If you want to sell Bitcoin for cash in Nigeria or Ghana, Prestmit is your best bet.
2. Sign up for an account.
Create an account with which you’ll carry out transactions on your chosen platform. Verify your identity or complete your KYC, depending on the prerequisites for P2P trading.
3. Set up your payment method.
To sell your Bitcoin on a P2P exchange, you’ll have to set up your payment method. This next step is vital as it determines how you’ll get paid for whatever offer you make or accept. Platforms like Prestmit have three payment methods – debit cards, cryptocurrency and gift cards. Paxful uses the same methods with online wallets as the addition. These are for accepting other users’ offers, i.e., buying. You can also set payment methods for selling.
4. Generate a sell order or offer
This is where you do the main work. Log in to your account and navigate to your dashboard. Check the menu or follow the prompt to create a sell offer. This should stand out on the page. A sell order is basically a display of what you have to sell. So, you’ll put in the amount of Bitcoin you want to sell or the minimum and maximum purchase you’re willing to accept. Then, set your preferred payment method, whether gift cards, another cryptocurrency or cash. You’ll also have to enter your price, which constitutes the main offer. From a buyer’s perspective, your sell order will look like what you see in the image below.
5. Wait for buying offers
The most-tasking part of selling your Bitcoin on P2P exchanges is waiting for buyers to accept your sell offer. You have to wait for someone who wants Bitcoin and is willing to accept your asking price. If you’re in a hurry, this may not be the best way to sell your Bitcoin.
6. Transfer the Bitcoin to the buyer
When you receive a trading offer from an interested buyer, initiate the trade on the platform. Don’t take the trade off of the exchange to avoid getting scammed. The platform will direct you on how to send your Bitcoin to the intending buyer and how they will send your payment across as well.
Ultimately, you get your payment, and the buyer receives the Bitcoin. Alternatively, another way to sell Bitcoin on P2P exchanges is to buy someone’s offer and pay with Bitcoin.
If you want a faster sale, you can buy whatever you wish to receive as payment with your Bitcoin. For example, if you want to receive gift cards as payment, look for a seller offering the gift card you want and is willing to accept payment in Bitcoin. This method may be difficult depending on the trading volume of the P2P exchange, and the volume depends on the platform’s popularity.
How to Choose a P2P Exchange to Sell Your Bitcoin
So, how do you choose a platform best suited to your needs? Consider the following factors.
1. Security
We cannot emphasise the importance of c=security for P2P transactions. Check the security protocol the exchange uses. Also, check the layers of security on user accounts. This tells you if your crypto, gift cards or cash will be safe or prone to hacking.
2. User Interface/Ease of Use
How easy is it to use the exchange? Does it feel like a complicated graph or trading spreadsheet? Any platform you choose should be easy enough to navigate without contacting the exchange’s customer support every minute.
3. Liquidity/trading volume
The trading volume of a P2P exchange determines its liquidity. You want to choose a platform that has a high number of buyers and sellers. This provides competition and better prices. Plus, you won’t wait long to sell or buy an asset.
4. Location restrictions
If you live in Nigeria and want to sell Bitcoin on a P2P exchange that caters only to East African countries, you won’t be able to. Some platforms have geographical restrictions due to regulations by the government. So, confirm that you can trade on a platform before you sign up.
5. Supported digital assets
Some platforms do not support all cryptocurrencies. Kucoin, for example, supports popular cryptocurrencies like Bitcoin, Ether and Tether. But you’d have to choose a different platform if you want to buy or sell a currency or asset apart from the ones supported.
6. Customer support
Although seemingly trivial, the customer support of any platform should be able to attend to its users and assist them with any issues they might have. Try the next best exchange if the exchange seems to have a weak customer support team.
7. Reviews
Reviews do not lie for the most part. Review the reviews of the exchanges you want to use and see what other users say about them. Are the positive reviews more than the negative? Or is it the reverse?
Use these factors to decide the best P2P exchange to sell your Bitcoin.
FAQs About Selling Bitcoin on P2P Exchanges
What exchange is best for P2P?
A: Binance has been rated by many as the best platform to sell Bitcoin or any other cryptocurrency. It is one of the biggest exchanges in the crypto space. But if you want to buy/sell other digital assets, you should try other platforms.
Is it safe to sell my Bitcoin on P2P exchanges?
A: Yes, using a P2P exchange to buy or sell cryptocurrencies like Bitcoin or other digital assets is safe. However, it is up to you to do proper research about the security of your chosen platform. Some exchanges have tighter security than others.
Conclusion
P2P exchanges are platforms that allow their users to buy and sell digital assets using blockchain technology. Individuals interact directly with each other instead of through an intermediary. You can sell Bitcoin on P2P exchanges with the steps outlined in this article. There are also tips you should remember when choosing a platform, such as security, trading volume, supported currencies, etc.
A convenient P2P platform like Prestmit removes any stress you might have in selling Bitcoin, USDT or gift cards. However, do your research to know if it meets all your needs. Do the same for all other platforms you want to engage with.
