Let’s face it, cryptocurrency does not yet completely replace cash that you have on hand and can use wherever you go. For example, when you visit your local home depot or Walmart, you still can’t pay for your items using Bitcoin or any other digital currency. Inevitably, you have to cash out your Bitcoin for day-to-day fiat currencies from dollars, euros, and pounds to whatever currency you wish to use.
On the other hand, some people might opt to cash out their hard-earned digital money for a completely different reason. They might decide they’ve had enough of the risky volatile market and wish to turn their crypto gains into a business venture or investment IRL. Mind that when you are a strong believer in Bitcoin, selling is the last thing on your mind. But as they say, to each their own!
For a full Bitcoin history recap, check out our take here! Today, however, we’ll talk about the so many options to consider when it comes to getting your cryptocurrency money back out! Be mindful that not every cash out may be relevant to every situation. And selling Bitcoin (BTC) is very akin to buying BTC but in reverse.
Let’s get into it!
Cash Out Methods
Peer To Peer (P2P) Selling Online or IRL
A peer-to-peer exchange on the blockchain is one where the transaction occurs between two individuals (The buyer and the seller) without an intermediary (like a bank or company). There are online methods via specialized platforms (Like LocalBitcoins) or you can do it IRL.
Furthermore, P2P transactions can be a lucrative way to cash out your Bitcoin since you can set your price with fewer fees. However, the process takes much more time in contrast to just loading a debit card or selling on a centralized exchange.
If you want to sell on your own terms then this may be a good way for you to convert crypto into cash. To some extent, P2P selling is safe. But, it’s important to be aware of fraudsters and scammers!
In general, Bitcoin buyers post listings on the aforementioned platforms noting their desired price and preferred payment option. Interested parties then find listings they like and complete the sale by following the instructions provided by the platform.
Depending on the payment option, the seller of the Bitcoin may receive a transfer directly to their bank account or card, a wire transfer, or an agreement to receive funds to some of the popular traditional payment platforms.
Cash Out Your Bitcoin Via Cryptocurrency (Broker) Exchanges
In the case of selling cryptocurrency, exchanges act as an intermediary. Basically, they hold funds from sellers and buyers. Some of the top exchanges include Binance and Coinbase (RIP FTX).
Let’s take Coinbase as an example. This exchange has an easy-to-use buy/sell button where you can choose which cryptocurrency and amount you want to sell.
You’ll quickly exchange cryptocurrency into cash, which you can access from your cash balance in Coinbase. From there, you can transfer the money to your bank account if you wish.
Pros:
- Easy to sell if you already have a wallet.
- Lots of exchanges to choose from.
- Faster than P2P selling methods.
Cons:
- Additional service fees on all transactions.
- Requires a bank account.
Via Bitcoin ATMs
You can go to a Bitcoin ATM to get fast access to your crypto and cash out. In detail, Bitcoin ATMs let you scan a wallet QR code and then sell BTC for cash.
The upside? The location of the nearest Bitcoin ATM to you can be found easily on the Internet. However, be mindful that they usually charge high transaction fees when compared with other methods.
In addition, not every Bitcoin ATM offers both buy and sell functionality, which is important to keep in mind when looking for a Bitcoin ATM at which to sell BTC.
Now, the biggest downside is as follows. If it’s your first time using a Bitcoin ATM to cash out, the process can be hectic. Basically, you may need to provide a telephone number for activation and notifications, a government-issued ID, a palm scan, and a current photo taken by the ATM’s camera.
This lengthy process varies depending on the machine and the operator running it, but some sort of identity verification will always be required if you want to sell Bitcoin.
Pros:
- Easy to find.
- Get cash from ATMs or use in-store and online.
- Cash out a lot or a little depending on your situation.
Cons:
- The registration process involves a lot of time, energy, and effort.
- High fees apply.
- Not available everywhere since some countries prevent any Bitcoin ATMs from being installed.
Use Crypto Debit Card To Cash Out Bitcoin
Like a regular debit card would do a normal bank account, a Bitcoin debit card pulls funds out of your crypto wallet. In the U.S., the most popular one is BitPay.
Not to mention that It is one of the cheapest ways to convert crypto to cash, while still receiving your cash near instantly. In detail, load the card from your BitPay Wallet balance then connect it to a Coinbase account.
Utility: Pay for things in-store, shop online, or withdraw cash straight from an ATM in minutes.
Before You Cash Out Your Bitcoin!
First, you must have BTC funds on hand in your crypto wallet in order to sell it. Clearly. And although this may seem simple, I advise you to make an informed decision! Kindly consider the following factors before you opt to turn your BTC into cash.
First of all, be mindful of the transaction fees required to convert your cryptocurrency into cash. Always take into consideration the size of your transaction before picking the method of Bitcoin cash out.
Next up are taxes. My advice to you is to speak with a Tax professional to understand how crypto transactions are taxed in your area. Because converting crypto into fiat is a taxable event regardless of the method you opt for.
Finally, how much time do you have? Each method takes a different amount of effort and time. For example, using the BitPay Card or selling on a Crypto exchange takes far less time and effort than selling on a P2P exchange or seeking out a Bitcoin ATM.
The Takeaway On Cashing Out
Bitcoin has had its fair share of ups and downs since pseudonymous Satoshi Nakamoto released its whitepaper back in 2009 and distributed it for free. Now, as I’m writing this, it’s a mindblowing $28,964.15 according to CoinGecko.
And I can tell you this with all confidence, no hardcore Bitcoin believer will choose to cash out as soon as they make a profit. They’re in it to win the war, not just the battle. So, before you sell, make up your mind on which team you belong to.
Consider your goals in the long run. Is converting your crypto into cash the right financial decision for you at this moment? As always, stay tuned for more!
