When all your coins and tokens are going up, its happy days. You keep checking your Cryptocompare Portfolio and it’s growing nicely. Live’s peachy. No one really thinks what will happen should they need to sell. Many people don’t even know how they would go about selling. But the profits are not really yours until you sell and realize them. Even better, until you have them on your bank account. Let’s run through a few essential steps you need to have ready at all times when investing in cryptocurrencies, tokens / ICO’s.
1. Store your coins & tokens in YOUR wallet
Don’t store them in the ICO dashboard (the page, where you have bought the tokens initially). Always withdraw them into a wallet that you control. Best for tokens is MyEtherWallet. The ICO (token website) should have steps on how to withdraw and add the token into MyEtherWallet. Here’s a manual directly from them.
You need to have some ETH balance to be able to send a token from your MyEtherWallet. It’s needed to pay for the transaction cost (GAS). Not a big amount, 10-50 USD is enough.
Why is this important?
- you can check the value of your token easily via https://ethplorer.io/
- you can send the token to any exchange easily
- it means you are in control – as opposed to having your tokens on a 3rd party (ICO) website that can become suddenly unavailable (because of a sudden surge of withdrawals for example) or they can decide to stop withdrawals for whatever reason.
2. Know which exchanges list your coins and tokens
(where you can sell them for BTC or fiat currency)
The more ICO tokens you own, the more exchanges you need to be registered with. I find that you can find the most tokens on Binance.com, HitBTC.com or Kucoin.com. If you don’t know on what exchanges can your token be exchanged for BTC or USD etc, check it on coinmarketcap.com – markets tab. You’ll see where the most exchange volume is focused.
Some of these are very easy to set up – you don’t even have to upload any form of ID. It’s because they fall outside of EU or US jurisdiction and usually don’t have to comply with so many rules. BUT – they often trade only in cryptocurrencies (no USD, EUR etc) and don’t have a withdrawal to a bank account. Therefore you still need to have a way to transfer your crypto into your bank account – and for that you need bitstamp.com or coinbase.com, where KYC (upload of your ID and/or passport) and verification process is needed. Therefore make sure you do have a verified account with an exchange connected to your bank account – or allowing withdrawals in your currency.
Why is this important?
- you can react fast – what if some bad news about an ICO surfaces and price starts dropping? There won’t be time for googling how to sell or finding out that you need some kind of verification.
- liquidity – a token is not very useful to you if you can’t sell it (unless you are an avid supporter and will use the technology and hold … and hold… and hold)
3. If you need to sell, the process will likely be following:
- you send the token from your wallet to an exchange where it’s listed (via a deposit option on that exchange) – usually takes under an hour
- you sell / exchange the token for BTC (usually instant)
- I recommend to exchange BTC for LTC or another low fee and fast crypto (BTC fee is much higher)
- withdraw your LTC or whatever crypto you exchanged for into an exchange connected to your bank account (or allowing easy bank account withdrawals). I recommend Bitstamp.com. This can take up to an hour, check the status of chosen cryptocurrency and their backlog if you want to be sure.
- sell chosen cryptocurrency for fiat (USD, EUR, GBP) – instant
- withdraw fiat to your bank account – a couple of days
Once you’re set up, it’s no rocket science, but it takes some time and clicking to get set up, so don’t leave it for the last minute – it could cost you a good chunk of your investment.