Are you looking for a convenient way to cash out bitcoin to your local currency? The process can be uncomplicated but a little time-consuming depending on the method that you choose.
In most cases, the easiest way is not always the cheapest when it comes to the chunk of fees that you will have to pay. So you should look into other practical methods and possibilities, and choose the one that suits you best. When it comes to cashing out bitcoin, here are a few things you need to keep in mind.
Disclaimer: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own research and analysis before making any investment based on your personal circumstances.
Factors to Consider when deciding on bitcoin cash out method:
You have finally made your fortune with bitcoin, and you are looking for the most practical way to transfer your digital currency into your local currency. The process can be daunting, especially when you are looking for a safe and reliable method to have your money in cash. But armed with the right knowledge, cashing out bitcoin can be as easy as apple pie. Before you can decide on the best method to use, consider the following factors
- Transaction fees and steps involved: Ideally, you want a method that is cheap, fast, and efficient. While some methods might be straightforward and promise a quick turnaround, they entail hefty fees which can be a put-off to many. Consider the amount of fees you will incur and decide whether it is the best method for you.
- Withdrawal amount: Not all cash out methods will facilitate your withdrawal of just about any amount that you like. You will need to consider the upper and lower limits that exist.
- Do you want to deposit into your bank account or PayPal?: Some methods allow you to withdraw funds to your PayPal account. You’ll need to do some homework on the methods that support a direct transfer to your PayPal. Depending on local regulations, and anti-fraud measures you may have to call your bank before cashing out large amounts of money in one transaction or else your account may possibly get frozen.
- The time it takes for your payment to reach your account: Depending on the method that you choose, it may take 1-5 days for the process to complete. Usually, fast methods come with chunky fees.
- The currency you are changing your bitcoin into: Some currency exchange platforms only support certain currencies and exclude others. When cashing out bitcoin, see whether the method or payment platform that you choose supports the currency that you wish to cash out into.
Overall, it is essential to remember the many pitfalls associated with cashing out bitcoin. These include taxes, although some jurisdictions have yet to come clean with tax regulation on bitcoin. Nonetheless, for tax authorities that have existing regulation around bitcoin and other cryptocurrencies, you may have to pay taxes on profits made from selling bitcoin. In some cases, the bitcoin exchange may provide your profit reports to the tax man during your cash out.
Try our SMART Bots 7 - days free
Experience the power of automated crypto trading with our superior trading system at the pack level of your choice
4 Methods of cashing out bitcoin
Ultimately, there are four practical methods of cashing out bitcoin to the fiat currency of your choice. They vary in the time taken to have the money in your account finally. These are generally accepted as reliable ways to withdraw your bitcoin to cash:
- Using fiat supporting exchanges
Cryptocurrency exchanges are third-party platforms that allow you to buy and sell bitcoin. They are also a common way to cash out bitcoin. Popular Fiat-supporting-exchanges such as Kraken, Bitstamp, and Coinbase are household names when it comes to cryptocurrency trading. Most of these exchanges have a robust security system that keeps your digital assets secure. The fees are also reasonable, making them accessible to almost anyone who has an account.
To begin with, you will be required to open an account at one of your favorite cryptocurrency exchange websites. You will then need to attach the required identification documents to ascertain your identity. Then buy or deposit BTC into your account. Once the BTC reflects in your account, you can easily convert it to cash via a bank transfer.
An important thing to note is the terms and conditions that exist, which vary from one exchange to another. It is advisable that you go through them and understand before depositing your crypto assets into the exchange. As a general case, the bank that you use to deposit at the exchange will be the same one that is accepted for withdrawals or when converting Bitcoin to fiat currency. In most cases, you may be required to make a small deposit through your bank account to be able to proceed with the withdrawal from the platform. This is a necessary step to combat money laundering and to comply with AML regulations.
The amount of time it takes to cash out depends on the platform that you have chosen as well as your country of residence. On average, this could take 1-5 days. Also, the currency of exchange matters a great deal. For example, when exchanging bitcoin to USD, the exchange brokers use the SWIFT payment method. For users who want to exchange Euros, payments are made with SEPA.
Luckily, you can find exchanges that support PayPal, which makes the whole process a lot easier and more convenient irrespective of your location.
- Peer-to-peer bitcoin exchange platforms
Peer-to-peer bitcoin exchange platforms provide an anonymous approach for cashing out your bitcoins and give you more control over your cash. P2P exchanges are secure and do not have a central authority that oversees the network. Despite their promise of privacy, the transactions are time-consuming and may be complicated to close.
If you are not careful, you could also be scammed of your hard earned money if you fail to do enough research to ascertain the credibility and trust of the network and the people you are dealing with. But generally, it is easy to find P2P exchanges that have a solid reputation and established credibility such as LocalBitcoins and Paxful.
P2P exchanges support a wide variety of methods such as Skrill, Payoneer, Western Union, Bank transfers, cash deposits, and gift cards. Sometimes you may be lucky to find ones that support PayPal or Neteller, which makes the process much easier. The withdrawal times and fees vary according to the platform.
- Convert bitcoin to stable coins
Many cryptocurrency exchanges such as Coinbase, allow you to convert bitcoin to stable coins such as their USD Coin (USDC). Other stable coins include Tether (USDT), Gemini Dollar, DAI, and PAX. Stable coins are a form of cryptocurrency whose value is attached to fiat money or exchange-traded commodities. This helps to eliminate the volatility of cryptocurrencies.
Stable coin companies have formed a partnership with issuer platforms, which ensures the price is relatively stable. It allows one to redeem the cryptocurrency without limitations easily. The main benefit of stable coins is that there is a low possibility to lose funds because of price changes, and you don’t have to worry about cryptocurrency exchange rates.
- Make use of Bitcoin ATM
A bitcoin ATM is a kiosk that uses an automatic teller machine for bi-directional transactions. A person can buy bitcoin using cash or convert it to fiat currency. While not the same as traditional ATMs, they function pretty much the same.
Bitcoin ATMs are connected to the internet, which then allows a person to insert a cash or credit card for the purchase or sale of bitcoin. They are not connected to a bank account or any centralized bank, but instead to a bitcoin exchange. This localization allows for convenient transactions.
The ATMs can be found in local retail stores, malls, restaurants, airports, or tavern.
There are Bitcoin-enabled ATMs, which are connected to banks and allow for the purchase of bitcoin from your bank account. These are different from a Bitcoin ATM. However, bitcoin-enabled ATMs charge high fees, which can be as high as 7%.
Bitcoin ATMs offer a convenient method for cashing out your bitcoin but can have high transaction fees. They are also not very common.
With bitcoin on the trajectory to its $100,000 mark by the end of 2021, the question that lingers on investors’ minds is “Should I exit totally from crypto in preparation for the bear cycle?”
While that’s a question that we cannot decide for you, we can suggest some ways that will still allow you ways to have a foot in the cryptoverse should you decide to exit a portion of your crypto holdings, in the event that a sharp correction hits.
Rule no. 1: Always protect your gains. While you Dollar Cost Average (DCA) your way into crypto, you could also DCA your way out of the market. That way, should bitcoin continue to soar further, you will still have a foot in the market albeit a smaller one. But hey! Think of the risk to rewards and that should set you at ease.
Besides DCA your way out, there is also the option of staking your remaining bag. Earning yield while waiting for your coin to soar higher is pretty sweet. Lastly, there is always the 4C Trading SMART Bots to help you trade automatically and accumulate gains over time. With the high volatility in crypto, there is no guarantee to what could happen next. However, with the SMART Bots trading on fully automated algos, you can rest assured that trading crypto during bear and bull markets can be a breeze, with no emotional rollercoaster ride!
If you haven’t signed up for the SMART Bots 7 Days FREE trial, we invite you to do so here.