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How to Sell Bitcoin in the UK

Last updated 23rd Nov 2022
Disclosure

Bitcoin (BTC) is a highly valuable asset that many crypto enthusiasts incorporate into their portfolios. It’s a great coin to hold for avoiding inflation and potentially earning a profit, making it perfect for UK residents. However, once you’re ready to sell, the process can get overwhelming due to the quantity and variety of available crypto platforms.

Therefore, to save you time, we’ve created this guide that discloses the best crypto platforms for selling Bitcoin in the UK. Also, we’ll cover how to select the top platform for yourself and if it’s really worth selling your Bitcoin.

Best Platforms for Selling Bitcoin in the UK

The UK is crypto-friendly with its regulations and laws. As a result, investors looking to trade Bitcoin in the United Kingdom have access to the top cryptocurrency exchanges and brokers. For your convenience, we’ve researched the best platforms for selling Bitcoin in the UK and placed them in the table below:

Key Takeaways When Selling Bitcoin in the UK

  • UK residents can take a capital gain tax allowance up to GBP 12,300 every year.

  • The best cryptocurrency platforms for selling Bitcoin in the UK are Coinbase, Binance, and Crypto.com.

  • UK investors can use DEXs like THORSwap, Bisq, and dYdX to sell Bitcoin anonymously.

Where Can I Sell Bitcoin?

UK investors have access to different types of crypto platforms for selling Bitcoin. However, they can differ in the services provided, fee schedules, and trading pairs. Therefore, when picking a cryptocurrency platform, you’ll need to factor in what features are essential and which services you value over others.

Cryptocurrency Brokers

Cryptocurrency brokers allow UK investors to trade Bitcoin without conveying ownership. They issue derivative products like CFDs, ETFs, and futures, which let you speculate the future value of BTC. Brokers are often preferred by beginners due to their ease of use and simplistic user interfaces.

However, the downside of not owning your Bitcoin is you cannot spend it or withdraw it to a private wallet. Also, this means you won’t have access to typical investing activities you’d find on other platforms like lending. The leading crypto brands in the UK are eToro and Plus500.

Pros

  • Easier to get started

  • Established brokers in the UK are regulated by the FCA

  • Easy to diversify your portfolio with exchanges as they offer assets in multiple markets

Cons

  • Higher fees compared to other platform types

  • You will not convey ownership of your Bitcoin

  • No option to deposit Bitcoin for selling purposes

Cryptocurrency Exchanges

Cryptocurrency exchanges are the most popular way of cashing out your BTC due to their vast range of services. Centralized Exchanges (CEX) provide a simple convert section where you can select to sell Bitcoin and the coin you want to receive. Alternatively, you can use the spot trading features, which come with tools and multiple trade options.

One huge advantage of exchanges is how they structure their fees. CEX use a tier system where you’ll pay fewer fees the more you trade, as platform costs are calculated based on your 30-day trading volume. In addition, a few exchanges provide their own cryptocurrency, which you can use to pay for fees and receive a discount.

Moreover, exchanges let you deposit Bitcoin from another platform or a private wallet, making them convenient to use. Also, you won’t have to pay a deposit fee, only the network fee for transferring Bitcoin. Coinbase, Binance, and Kraken are a few of the leading brands worth checking out.

Pros

  • Low fees

  • Multiple trading pairs for Bitcoin

  • Established exchanges have high liquidity for Bitcoin

Cons

  • Exchanges require completing KYC to withdraw fiat currency

  • Easy to input the wrong deposit address when depositing Bitcoin

  • Trading interface can look overwhelming to beginners

Decentralized Exchanges

Decentralized exchanges are rapidly growing because they allow investors to be anonymous when trading. These dApps are not regulated nor owned by a single company, making them appealing to investors who want to stray away from centralized platforms. DEX operate using smart contracts and are built on an underlying blockchain.

To use a decentralized exchange, you’ll need a compatible wallet with Bitcoin stored inside. Once you launch the dApp, you can connect your wallet and select the coin you want to acquire. After you’ve inputted how much Bitcoin to sell, you’ll get a confirmation from your wallet with the expected fees.

Similarly to CEXs, DEXs have a maker and taker fee but do not use a 30-day tier system. Instead, all fees on decentralized exchanges are fixed and will not change if you increase your sell orders. Our top picks for DEXs in the UK are dYdX and THORSwap

Pros

  • You can be anonymous when trading

  • Fixed fees

  • Decentralized way of trading Bitcoin

Cons

  • Limited number of DEXs trading Bitcoin

  • Beginners may find this type of platform difficult to use

  • Cannot convert your Bitcoin into fiat currency with DEXs

P2P Services

Peer-to-peer websites let users list their coins and the price of which they want to sell them at. The buyer can accept the trade terms or continue searching for a better deal. Also, some P2P platforms let you set how you’d like to be paid for more convenience. If you’re interested in this type of platform, check out LocalBitcoins, a great peer-to-peer brand that operates in +190 countries and supports more than 150 payment methods.

Pros

  • Can get better deals since you don’t need to use an intermediary like an exchange

  • P2P services support multiple payment methods

  • Low trading fees

Cons

  • Low liquidity

  • Risk of getting scammed

  • Trading speeds are very slow

What Are the Fees for Selling Bitcoin on Popular Platforms in the UK?

Cryptocurrency platforms have different fee structures that will impact your profits when selling. Below you can examine what the costs will be for selling GBP 1,000 worth of Bitcoin using the following brands:

PlatformeToroCoinbaseBinanceDeposit fees000Purchase fees1061Holding fees000Selling Fees1041Payout fees500Total fees25102

How to Sell Bitcoin in the UK

Selling Bitcoin in the UK is a fairly straightforward process but can seem confusing if it’s your first time. Therefore, we’ve created a step-by-step guide to help guide you. For simplicity reasons, we’ll cover how to sell Bitcoin using an exchange like Coinbase or Binance.

Create an Account

Once you’ve chosen a cryptocurrency platform that suits your needs, it’s time to create an account. Start by clicking the register button and provide your email address with a password. Next, you’ll need to provide information about yourself, like name, address, and phone number.

You’ll receive a verification link in your email that you need to open to access your dashboard. Finally, verify your identity to comply with KYC laws and lift account restrictions.

Deposit Bitcoin

Head to the deposit section and choose to transfer cryptocurrency. Then select Bitcoin, copy the deposit address, and paste it into your wallet app. Send the amount you’d like to sell and wait for the Bitcoin to arrive in your exchange wallet. Typically, Bitcoin transfers can take anywhere from 10 minutes to 1 hour to complete depending on the network load.

Sell Bitcoin

To sell Bitcoin, navigate to the convert section. Select Bitcoin as the cryptocurrency you want to sell and choose the coin you want to acquire in the other section. Now type in how much BTC you want to cash out and hit the “convert” button to complete the transaction.

What to Consider When Choosing Where to Sell Bitcoin

The platform types we’ve covered offer a diverse range of services for cryptocurrencies, which can influence your decision when signing up. These are the main considerations to make when selling your Bitcoin and picking a crypto platform:

  • Taxes: When you convert your Bitcoin into fiat currency at a profit, you’ll need to pay taxes. The amount varies depending on your income bracket and if you’ve used your GBP 12,300 capital gain allowance. Therefore, you may consider converting to a stablecoin or an altcoin before cashing out your investment.

  • Security: Keeping your coins safe should be a huge concern, as many unethical hackers and scammers will take advantage of any vulnerabilities. Only use platforms with high levels of security since you don’t want your funds to get stolen. Also, you can increase your protection by whitelisting crypto addresses and enabling 2FA.

  • Reputation: A crypto platform’s reputation matters greatly as it’s a clear indicator if it's worth creating an account and trusting the brand with your investment. Reviews left by previous investors are perfect for seeing if the platform offers a premium service.

  • Volatility: Bitcoin is a volatile asset that constantly dips and rises. You may cash out and watch Bitcoin rise, resulting in you regretting your decision to sell. Before selling, it’s a good idea to create a plan with sell-off points.

  • Anonymity: Privacy is a growing trend, and more investors want to stay anonymous when trading. DEXs are the primary choice for trading without ID as you only need to connect a wallet to the platform. However, you can use CEXs like Binance and KuCoin without verifying your identity.

  • Coin variety: When cashing out your Bitcoin, you can convert it to another cryptocurrency or fiat currency. If you want to continue investing, it’s important that the crypto platform offers the coins you want along with trading pairs compatible with Bitcoin.

  • Withdrawal methods: After you’ve sold Bitcoin, you’ll want to withdraw it off the platform. Therefore, checking if the crypto platform offers withdrawal methods you need before signing up is a good idea.

Do I Have to Pay Taxes When Selling Bitcoin in the UK?

Yes, UK investors must pay taxes on crypto profits once they cash out their investment. The United Kingdom is fairly simple on how cryptocurrencies are taxed and do not have short-term or long-term capital gain tax, like other nations. Also, you have the option to pay 0% tax on profits up to GBP 12,570 if you use the Personal Income Tax Allowance program.

  • 10% tax on income up to GBP 50,270

  • 20% tax on income from GBP 50,270 to GBP 150,000

  • Anything above GBP 150,000 will be taxed again at 20%

Should I sell my Bitcoin?

In my opinion, I wouldn’t sell Bitcoin as the cryptocurrency has significantly fallen from its all-time high of GBP 47,825 to below GBP 20,000. In fact, I would state now is the best time to buy and build a portfolio for the next bull run, as Bitcoin has always historically performed well.

However, if you’ve made a sizable profit from Bitcoin, it’s always recommended to take out profits along the way. This is because Bitcoin is highly volatile, and its price is unpredictable. Note: Not a Financial Advice (NFA).

Final Thoughts

To summarize, we’ve explored the types of platforms you can use to sell Bitcoin and what to look for before creating an account. Remember that security, fee structure, reputation, and available withdrawal methods are essential factors when choosing a cryptocurrency platform.

eToro, Crypto.com, and Binance are a few brilliant platforms you can use right now to sell Bitcoin at competitive rates. Also, they all offer popular withdrawal methods along with multiple trading pairs for Bitcoin.

FAQs

What Is the Best Platform for Selling Bitcoin in the UK?
How Do I Sell Bitcoin Anonymously in the UK?
Is It Worth Selling Bitcoin Right Now?
Is There a Limit on How Much Bitcoin I Can Sell?
Can You Sell Bitcoin if You’re Under 18 in the UK?

Dominikas Pupkevicius