The 24/7 crypto market provides a lot of opportunities to make a profit due to the high volatility of digital assets. This is much more profitable than Bank deposits or investments in other assets, such as gold or oil. In just a month, cryptocurrencies can generate more returns than any traditional assets. However, the risks are increased accordingly. We will tell you how to sell bitcoin to make money and not wait for several years until the investment capital grows.
Shorts
Short positions are opened in order to profit not from the growth of the cryptocurrency price, but from its fall. If you missed the price increase, do not worry – there is always an opportunity to open a short position and make a profit if the cryptocurrency becomes cheaper.
However, you must remember that you are using borrowed funds, which increases the risk of losing money. If the cryptocurrency does not fall in price and its rate increases significantly, there is a risk of a margin call. This is an event that requires additional collateral to prevent the position from being liquidated. If you are unable to make an additional deposit, your transaction will be canceled and the deposit amount will be fully debited from your account.
This is called margin trading, in which the margin is your collateral amount of bitcoins. Margin trading is supported by many crypto exchanges, including:
- Binance;
- OKEx;
- BitMEX;
- ByBit and others.
The only way to reduce the risk if you use leverage is to use a small part of the deposit. When opening an order, the exchange usually displays the liquidation price at which your position would be canceled. The smaller the deposit amount you use, the further the liquidation level will be from the current price and, accordingly, the lower is the risk.
Arbitrage
Aggregators and quote providers use the average value of rates. On various crypto exchanges, the Bitcoin exchange rate may differ by 10% or more. This opens up arbitrage opportunities. There are services that allow you to automate this process via the API using bots. Bots buy cryptocurrency on one exchange, transfer it to another and sell it there. For each exchange, the service makes a profit
There are other approaches. For example, the HiRiBi service (https://hiribi.com/) also uses the “Rate Fluctuation Protection” function. The exchanger protects users from fluctuations in the bitcoin exchange rate, thereby providing the highest selling price. It doesn’t matter whether the exchange rate rises or falls – in any case, the user sells cryptocurrency at a higher rate than the average market rate.
For example, you send 1 BTC at a price of $10,000, and the next day the Bitcoin exchange rate rises to $12,000. In this case, you will get $12,000 instead of $10,000. And if the price falls, you will get the amount that was at the time of creating the exchange request. Another important advantage of HiRiBi is that it is possible to make a profit immediately. You don’t need to wait for the exchange rate to rise and fear that it will fall and you will lose some of your profits or suffer losses.
The HiRiBi service (https://hiribi.com/) allows you to exchange Bitcoin to PayPal USD in 4 simple steps. Funds will be sent to your PayPal wallet immediately after 3 network confirmations.
Using trading tools
Crypto exchanges provide tools that allow you to sell Bitcoin higher and reduce the risks in the event of a price collapse. One of such tools is stop loss. With the help of a stop loss, Bitcoin traders set the acceptable level of losses. For example, if you set a stop loss at 5% below the purchase price, then if the Bitcoin exchange rate falls, you will lose exactly that much. Even if the price of BTC drops by 15%, you will only lose 5% of the transaction amount.
But how can I use this tool to increase my income? There is such a tool as a trailing stop. It works as follows: if the price of the cryptocurrency increases, the stop loss moves up to the specified step level. Let’s say you bought bitcoin at $10,000 and set a trailing stop in 2% increments. As soon as the cryptocurrency exchange rate increases by 2%, the stop loss will automatically move to the break-even point. And if the rate rises by another 2%, the stop loss will be 2% higher than the purchase price ensuring a guaranteed profit that you will get even if the rate rolls back. The stop loss will move as long as the price rises and does not touch it.
Futures
Another way to earn more on sales of bitcoin. Futures are contracts that oblige at a certain point in the future to deliver an asset or buy it back at the price specified by the seller. Futures contracts are a popular tool among crypto traders and investors for hedging market risks.
Here’s how it works: you open a deal to sell Bitcoin at $12,000. Even if at the time of expiration of the contract, Bitcoin price will be lower, for example, $10,000, the buyer (exchange) will be obliged to buy the goods at this price. However, if Bitcoin will be $20,000 at this point, you will still have to sell Bitcoin for $12,000.
Like margin trading, futures allow you to buy and sell assets for a larger amount than the trader has at the time of the transaction. However, unlike margin trading, when entering into a futures contract, traders do not use leverage and do not provide cryptocurrency as collateral. But at the time of the transaction, they have to pay 10% of the order value. At the same time, the trader does not borrow money from a broker or other players, so there are no restrictions on transactions: a margin call will not occur, and the position will not be liquidated.
Delayed arbitrage
This method is similar to crypto arbitrage but has some key differences. This method is perfect if the cryptocurrency exchange rate has fallen sharply. At such times, there is strong volatility in the crypto market, and the rates on different exchanges may differ significantly. So, after the collapse, find the crypto exchange with the lowest Bitcoin price. This can be done using CryptoCompare (https://www.cryptocompare.com/coins/btc/markets/USDT) or CoinMarketCap (https://coinmarketcap.com/currencies/bitcoin/markets/) services.
Buy cryptocurrency on this platform and hold it until the exchange rate recovers or increases. You can send coins to your wallet to store them safely. As soon as the exchange rate recovers or volatility decreases, find the exchange with the highest rate, send Bitcoin to it, and sell the coins. You just need to check the fee, so that it does not absorb most of the income.
And if the exchange rate has not recovered and you are tired of waiting, you can sell cryptocurrency on the HiRiBi service at any time (https://hiribi.com/) at the highest price. Even if the BTC rate fell even lower after the purchase, you can sell Bitcoin without losses. But only if the drop was no more than 10%. In any case, you can use HiRiBi to compensate for at least some of the losses in the event of an unfavorable outcome.
Conclusions
We’ve covered five ways to sell Bitcoin to earn dollars or another currency. These methods are available to users with any experience of using cryptocurrencies, but some of them, such as margin trading or futures, involve high risks of losing funds. Keep it in mind when choosing a suitable way to sell Bitcoin with a profit.
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