You’ve bought your tokens, the tokens have an established price on an exchange, and you’re ready to cash out – where you do go from here?
You’ve got the tokens in your Ether wallet, so you should head over to the exchange on which the tokens in question are listed and make an account. Keep in mind that Coinbase doesn’t contain these ICO assets as things stand, so you’ll probably have to open an account with a Cryptocurrency exchange you’ve not dealt through before.
So, you go to the exchange, you open an account, and you need to fund the wallet that’s associated with the account. To do this, you’ve got to send your tokens (the ones in your external Ether wallet) to the Ether wallet that’s linked to your exchange account.
The next step is to sell your tokens for payment in Ether.
So, find the pair that includes both your token name and Ether. Ether will generally be denominated as ETH, so if your token is (for example) EOS, you want to locate the ETH/EOS pairing.
You then want to sell ETH for EOS. Input how much EOS you wish to sell, execute on the transaction (this will typically involve some form of confirmation so as you know how much ETH you are getting for your EOS), and you are good to go. The ETH will be deposited in your Ether wallet, the one linked to the exchange account, and you are free to do as you wish with it from there on out.
For example, you can convert it to the cryptocurrency of your choice.
For the sake of simplicity, let’s make use of bitcoin. It needn’t necessarily be bitcoin, however. Sticking with Coinbase, you would send the ETH to your Coinbase Ether wallet and use it to buy BTC in the same way described above. You can also use this process to convert it to fiat (USD, EUR, etc.) and withdraw it to your bank account.
The idea, of course, is to ensure that the amount of ETH you sent to the crowd sale wallet initially is lower than the amount you receive when you convert your tokens back to ETH on the return leg of the transaction.
How do people generally trade with Bitcoin?
Perhaps you are a forex trader, and you have some experience in the currency markets – you now want to know, can the same experience be transferred to the cryptocurrency space?
Perhaps you’ve got some experience in the equities markets, and you want to know if you can transfer your day trading strategy to cryptocurrency?
These are sound questions, and the answer to them both is the same – yes.
Of course, there are specific differences between trading a cryptocurrency like bitcoin and trading equities or standard fiat currencies, but these are mainly mechanical, process type differences.
At the core, the concept is exactly the same – buy low, sell higher.
Just as is the case with other, more traditional financial assets, it is possible to profit from a downside movement in cryptocurrency.
Let us just look at trading bitcoin in an attempt to profit from price appreciation.
There are two primary approaches a bitcoin trader can take to profiting from volatility in the cryptocurrency markets. The first is by using a standard bitcoin exchange to buy and sell the underlying asset.
You may have heard about the whole buying and selling cryptocurrency in quite a lot of detail already but, by way of a quick recap, to buy bitcoin, you will need a bitcoin wallet and a source of funds that you can link to an account on an exchange. You send the funds (generally in fiat, so USD) to the exchange and, in return, you receive bitcoin in your wallet.
If you are just looking to buy and hold for an extended period, there is very little you need to do outside of the above-described process.
When you decide to sell your bitcoin and cash out of the position, just reverse the transaction – so you sell bitcoin over the exchange for fiat currency and withdraw to your fund source. The profit, of course, is the difference between the amount of fiat currency you paid for the bitcoin in your wallet and the amount of fiat currency you received when you sold the bitcoin back across the crypto trading platform such as Rubix.