Want to know how to cash out your bitcoin? No matter where you live, there are several ways for you to cash out. You can exchange your BTC for fiat money or other cryptos to suit your preference. You have come to the right place – we will explore your options in this post.
Since its advent, bitcoin has come a long way, and businesses are seeing the benefit of accepting cryptocurrency for in-store and online purchases. However, its adoption in some industries and places is faster than in others, which means that the options for accepting payments or cashing out are somewhat disproportionate depending on the circumstances.
For trading between currencies, making investments, playing at bitcoin casinos, and even paying for everyday goods, it is necessary to know how to cash out bitcoin or convert it to fiat money. For example, if you are into crypto gambling and want to cash out at the end of your session, this guide is here to help you.
Although your options are not endless, there are still many available. As always, you need to outweigh the pros and cons that come with each option. After that, you can decide which is best suited for you.
6 Options On How To Cash Out Bitcoin
- Bitcoin ATM
There is not much difference between cashing out cryptocurrencies to cashing out money from your bank account. Instead of withdrawing from a bank account, you would remove money from a cryptocurrency wallet. Bitcoin ATMs allow people to cash out their money on the spot.
The process of withdrawing cash from this ATM is quite simple. The machine requests that you transfer your cryptocurrency to a particular wallet address within a fixed timeframe. Once this process is confirmed, it releases your cash.
Remember that problems may arise if you do not live close to a bitcoin ATM. Another problem is that sending cryptocurrency may take time. You will have to wait until your transaction is validated on the blockchain first until you can withdraw your cash. This process can take ten minutes to hours, depending on various factors.
The fees and rates are among the most discouraging things about these ATMs. These rates are often higher than when using an online service, as you do not have time to determine the better options. For example, you can open a new tab, search for an online service, and find another solution provider.
Unfortunately, ATMs can also be a hotspot for money laundering schemes. These machines being used for money laundering could become problematic for other users as there will be high surveillance. CipherTrace has found that they are frequently used to send funds to high-risk exchanges.
2. Online Service/Centralised Exchange
Online services like Coinbase and Binance allow you to cash your bitcoin into a bank account. They are an easy solution if an ATM is not an option for you and do not require you to leave your home.
However, some problems arise with these services as they usually limit the locations where they can cash out the funds. For example, Coinbase only allows you to withdraw your funds into bank accounts in the United States or specific European countries. This limitation can become problematic if you reside outside of these countries.
Waiting times can also be a problem when using online services. The average time it takes for money to reach your account in the United States is 4-6 days and varies by country. It may not be your option if you need your cash more immediately.
3. Wallet Service
Cryptocurrency wallets are not only there to hold your currency but also offer other services. One of these services includes the ability to cash out. It is simply a case of finding the right service provider to help you decide how to cash out bitcoin.
Cryptocurrency wallet Luno allows customers to cash out bitcoin into their bank accounts. Luno processes the withdrawal automatically, and your money is released depending on how long your bank takes to clear it.
The problem with getting your cash comes with the bank. Banks are heavily regulated institutions, so they generally do not favour cryptocurrency. Their reluctance to work with cryptos costs time and money to many currency holders. Due to banks requesting documents or blocking their transactions for security reasons, people often avoid this option.
Another issue is the wait time involved in clearing your BTC into your account. Banks may take longer than usual to clear the money as they need to ensure that it is not illegal money, for example, coming from a money-laundering scheme.
Companies like Crypterium have tried to simplify this process by providing smoother, less bureaucratic access to your cryptocurrency. Instead of sending the money to banks, you can send it straight to a bank card. Users can cash out bitcoin or any other digital currency with a few clicks and get money credited into their card’s balance.
4. Cryptocurrency Debit Cards
Cryptocurrency debit cards connect digital currency to a well-known, widely accepted payment and withdrawal method. Because of this, they are one of the best ways when considering how to cash out bitcoin.
A cryptocurrency card and crypto wallets, used to top it up, are linked. Cryptocurrencies are converted to fiat money when the crypto card is topped up. With this fiat balance, a user can shop at any store that accepts card payments and withdraw cash at a regular ATM.
There are geographic limitations to using a crypto card. Most crypto card companies focus on the United States, the United Kingdom, and other European countries, often leaving out places like Brazil, South Korea, and India. However, bitcoin is significant within these countries, and people are looking for solutions to cash out.
Crypterium is one of the only companies that offer a debit card service in more than 150 countries. They are also attempting to expand their service and overcome geographical limitations.
5. Third-Party Broker
Another common way to cash out bitcoin is through a third-party broker exchange. Most of these exchanges have reasonable fees and adequate security measures to help with the question of how to cash out bitcoin to turn your crypto into cash.
You will first have to create an account, send the required identification documents, and deposit the bitcoin into your account. Once the broker has received the BTC, you can cash out to fiat money through a bank transfer.
Most platforms allow you to cash out with just the bank account you used to deposit the funds, which means you need to deposit a small amount of fiat money first to make a withdrawal. Although this step slows down transactions, it is used to prevent money laundering and comply with international AML regulations.
How long it takes to cash out depends on the platform you use and the country in which you reside, and it can take from one to five days. When changing bitcoin to USD, brokers use SWIFT. Payment methods like SEPA are used if you are in the EU and ask for payments in euros. Some third-party exchanges also accept PayPal withdrawals, which can speed up the process.
Regarding safety and security, third-party options are a good bet as they are always secure and have safety measures. Although it may take longer to receive your funds, it is an excellent option to secure your transactions.
6. P2P Exchange
Although cryptocurrency exchanges are reliable and secure, users lack anonymity. Try a peer-to-peer exchange if you’re looking for a more anonymous way to cash out your funds. Most of these platforms are secure, but it may be time-consuming to close transactions.
The most popular P2P exchanges are LocalBitcoins and Paxful. Transactions on these platforms occur privately between users, and there is no mediator. Although this provides anonymity, it also increases the risk of scams.
There are various payment methods that users can choose from, with each method having its fees and waiting times.
When working with a P2P exchange, you must make an account on one of the platforms, verify your identity, find a buyer, and make your transaction. If you are unsure how to find a buyer, most platforms have a rating system to choose a buyer based on their previous transactions.
Looking for a P2P exchange platform with an escrow service is also your advantage. With this, you can lock your bitcoin until you confirm that the buyer has made the payment.
You must stay vigilant when using a peer-to-peer exchange as it is easy to fall into scams. This incidence of scams is why many P2P exchange platforms put aspects like rating systems and escrow services. P2P is excellent if you want a service that allows anonymity and less waiting time.
Things To Remember Before You Cash Out Bitcoin
Before you exchange your crypto for fiat money, there are some things to remember.
Two things are inevitable: death and taxes, even for bitcoin investors. Although stances on BTC and taxes still need to be clarified, most authorities say that you have to pay taxes on the profits you make when you sell it for fiat money.
And don’t think you can bypass this rule either. Some exchanges report your profit to the tax man when you cash out.
Taxing your profits makes converting BTC to fiat money much more difficult and time-consuming. It is a necessary measure that most jurisdictions take and something you need to know when deciding how to cash out bitcoin.
Most services that allow you to cash out have exchange fees. These fees can be exorbitant, so you may lose a lot while trying to get your cash.
Fees also depend on the location of your bank. For example, if you are selling bitcoin for USD, a wire transfer can be as much as $25, whereas if your bank is located in the EU, fees can be as little as $0.15.
If you are using a P2P exchange, fees may be negotiable with the seller, or if they are your friend, you may be able to persuade them to waive the transaction fee altogether. Avoiding fees will still be challenging if you go the traditional route.
Other Things To Consider
When converting bitcoin to fiat, you need to consider various things such as the ease of cash out method, whether you want it deposited in a bank account or your PayPal, the currency, and how long you want to wait. Whatever your needs may be, there is a method that fits. Options are also becoming more prevalent as bitcoin continues to grow globally.
When considering if you should cash out first, ask yourself if the pros outweigh the cons. You do not want to go through the process of converting BTC to fiat if you do not necessarily need it. You have to consider that you are dealing with money and that there will be specific rules and regulations.
The Bottom Line
It can be a bit of a process when deciding on the best method to cash out bitcoin. The better you know your options and understand what is required of you, the more informed decision you can make.
Whether you want to use an ATM, third-party service, a peer-to-peer or centralised exchange, or a cryptocurrency card to cash out, it is always a good idea to be aware of withdrawal limits, waiting times, and fees.
It is not impossible to cash out, and these options are only the beginning. Many businesses see the value of using bitcoin and provide opportunities to convert it to cash.