The world of cryptocurrencies like Bitcoin is surely exciting. But it does not feel so when digital assets keep plunging in value. That is what has been happening for the past two years now. In such a case, you may wonder how to cash out your Bitcoin.
Fortunately, the task has become a lot simpler. You can cash out your cryptocurrency by withdrawing it through an online broker or a crypto exchange. You can also withdraw it through a crypto debit card. But you cannot just cash out. You need to keep in mind certain things like taxes, transaction fees, and your long-term goals while cashing out. In this post, we will dive into all these details.
How to Convert Bitcoin to Cash?
There are innumerable ways to convert Bitcoin into cash. These include using cryptocurrency exchanges, P2P platforms, and Bitcoin ATMs. You may even sell the currency directly to those who wish to purchase it for cash.
1. Use a Centralized Exchange
This is the most common way to cash out your Bitcoin. An exchange such as Coinbase has a simple buy/sell button. It lets you choose your Bitcoin and sell it. This, in turn, lets you exchange Bitcoin for cash, which you can find in your balance in Coinbase.
After that, what you do with that money is up to you. Binance and Kraken are other good cryptocurrency exchanges to look into.
POINT TO NOTE: Coinbase charges $0.99 if you sell $10 worth of Bitcoin. If you want to lower the selling fee, use the advanced trade platform on this exchange.
2. Use Peer-to-Peer Trade
A peer-to-peer online platform lets you cash out your Bitcoin by direct trading. You discover the top offers through an exchange or in person. For example, Binance has the platform Binance P2P. It escrows your Bitcoin after you agree to trade.
After you ensure the transaction record in your account and confirm the money you have got from the buyer, Binance will make your Bitcoin accessible to the buyer.
3. Consider Bitcoin ATM
In recent years, numerous Bitcoin ATMs have emerged in various parts of the world. You can find them at a grocery store or a gas station. Through them you can buy crypto. But if you want to withdraw Bitcoin, look for ATMs that let you sell the cryptocurrency. When you find a suitable ATM, choose Bitcoin as your cryptocurrency and give a document for identity verification.
Now, from your digital wallet, scan the QR code of the Bitcoin ATM. This will let you dispatch the crypto to the ATM address. When your Bitcoin is successfully sent, the ATM will give you cash.
POINT TO NOTE: Bitcoin ATMs usually charge a very high fee for withdrawing digital currency. You will have to pay the fee to transfer your Bitcoin as well as the transaction and service fee.
4. Use a Crypto debit card
Crypto debit cards enable you to spend your cryptocurrency balance. These cards are linked to a centralized cryptocurrency exchange account. You need to swipe your debit card to convert your Bitcoin into cash.
An example of a crypto debit card is a Visa card by Coinbase. It lets you spend the balance in your Coinbase crypto. It automatically sells the cryptocurrency you have chosen, in this case, Bitcoin. Then it uses the cash for your purchase.
You can also use the Coinbase crypto debit card to withdraw money from an ATM. Using this debit card in the ATM will not lead to any extra fee. You can withdraw up to $1000 a day.
5. Cash Out Through Money Transfer Apps
You can trade and cash out crypto easily through money transfer apps. a leading example is Cash App. It has a crypto exchange, which lets you cash out your holdings. Just remember to hold your Bitcoin within this app if you want to convert it into cash.
To sell your Bitcoin through a money transfer app, you need to pay a fee. Don’t worry, it is not a very big amount.
6. Cash out your Bitcoin holding for usual purchases
You can also spend your Bitcoin on buying something from a business that accepts it. Most retail businesses today accept Bitcoin. You can see a ‘Buy with Bitcoin’ option displayed at the checkout of many stores. If you are purchasing online, locate the Bitcoin symbol on the store’s checkout page.
7. Buy Gift Cards with Bitcoin
You can spend Bitcoin on buying gift cards. This option is for those who do not necessarily want to turn their cryptocurrency into cash. Gift cards like Amazon, Xbox, eBay, and many more can be taken through Bitcoin.
You can pay lower network fees when buying gift cards. It also has the advantage of instant email delivery.
Things to Consider Before Cashing Out Bitcoin
While cashing out Bitcoin, its crucial to be aware of the consequences. Consider the following before converting your Bitcoin to cash.
- You may owe taxes on the money you get from Bitcoin sales. It’s because, in the US, cryptocurrency is regarded as a property. So, you must track your digital wallets and accounts and assess the situation before selling your Bitcoin.
- Know that there is a fee involved. We mentioned earlier that you will need to pay some fee to convert Bitcoin into cash. Sometimes, this fee goes beyond your expectations. If you sell through a crypto ATM, the selling fee will be high, which can neutralize your profits.
- It can take time to get the money. Don’t expect cash to be reflected immediately into your bank account. Many broker exchanges take a few days to transfer the cash into your account.
- Have a solid investing strategy. Many investors think of selling crypto when the market situation is gloomy. But this can be a mistake. If you are investing for the long term, selling crypto when the market situation is against you can be a mistake. Prices can soon recover, which will make you regret your decision.
There are various ways how to cash out your Bitcoin. But ensure that you take this step only if it aligns with your goals. The good thing is that just like buying, there are various avenues for selling Bitcoin also. Choose one of the above methods that you feel is suitable for you.