Using P2P exchanges to cash out bitcoin provides privacy, but it comes with a premium – a price premium, to be precise. Whether you’re buying or selling crypto on these semi-decentralized platforms, be prepared to take a hit on the market price. If you’re planning to sell bitcoin on the leading peer-to-peer platforms, here’s what you can expect to receive below the spot price.
Privacy But at What Price?
On centralized cryptocurrency exchanges, the spot price for digital assets is set by thousands of traders simultaneously executing buy and sell orders. On P2P exchanges, those numbers run into the dozens at best, and single figures in some cases. With each buyer adding their own fee to ensure the trade is profitable, you can expect to receive anywhere from 1-15% below market price. To determine the typical premium commanded by P2P exchanges, news.Bitcoin.com checked the best price offered for payment by bank transfer on six platforms: Bisq, Hodlhodl, Localbitcoins, Localcryptos, Agoradesk, and local.Bitcoin.com. Here’s how they stacked up.
Bisq is an open source application for buying and selling BTC and other cryptocurrencies. Using it requires installing the Bisq desktop client and connecting to Tor. The additional steps required to trade on Bisq account for its limited usage; the platform averages just 2-3 trades a day.
Bisq users start off with a trading limit of 0.01 BTC but this can be raised once another trusted peer has signed your account. In practice, this means you’ll encounter lots of small sell orders on the site. If you’re looking to liquidate large amounts of BTC, Bisq really isn’t the place. When visiting Bisq, news.Bitcoin.com was able to sell BTC at an average of 7% under spot price, but the order size was limited to 0.08 BTC and required two trades.
Agora Desk is a P2P exchange for BTC and XMR with a mediocre reputation. The complaints it fields appear to be mostly targeted at the price premium, rather than due to any intrinsic flaws in the site. Available on the clearnet and darknet, Agora will let you cash out quickly and easily, but expect to receive 10% under spot for your coins.
Localcryptos, recently reviewed by news.Bitcoin.com, is the daddy of P2P exchanges when it comes to liquidity, with $126K of crypto shifted in the last 24 hours. On Localcryptos, you can sell BTC or ETH at just 4% under spot price.
Localbitcoins.com (LBC) doesn’t really belong on this list since it introduced KYC, which defeats the entire point of cashing out P2P. Nevertheless, it is still a P2P exchange, and a dominant one at that. In testing, it was possible to cash out BTC at just 0.5% under spot for orders over $750, and 1.5% under for smaller sales. There’s a lot to fault with LBC, but you can’t fault that tight spread.
Hodlhodl’s best achievement is orchestrating the Baltic Honeybadger conference, though it also serves as a reasonable P2P exchange. The best offer available on the site is 3% under market price, which isn’t bad at all.
Local.Bitcoin.com is a BCH-only P2P exchange. When filtering for U.K. buyers, offers start at just 0.5% below the spot price for bitcoin cash. For the U.S., however, it’s a different picture, with the best offer for bank transfer coming in at 6% below spot, and limited to $200 of BCH. When other payment methods are selected, though, it’s possible to sell large amounts of BCH in the U.S. via Cashapp or Skrill for just 3% below spot.
And the Winner Is…
If you’re using a P2P exchange to cash out crypto to cover everyday expenses, you’re already a winner. However, if you’re seeking a P2P platform solely on price, your best option is Hodlhodl at 3% under or Localcryptos at 4% under. (LBC technically provides a better price, but the KYC hit means it isn’t worth it.)
In third place is local.Bitcoin.com (-0.5-6%), followed by Bisq (-7%) and Agora (-10%). For some bitcoiners, however, the additional privacy provided by the latter two markets may justify the price premium. And remember, if you don’t like the price being quoted, there’s nothing to stop you from creating your own ad on a P2P exchange, naming your price, and waiting for the buyers to come to you.
What P2P exchanges do you recommend? Let us know in the comments section below.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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