What Are the Best Methods to Turn Bitcoin or Crypto into Cash?

Cash Out Bitcoin: How Can You Cash Out Bitcoin for Real Money

Bitcoin is now as mature as any other fiat currency, and it is now an accepted and integral part of the financial system. So now, if you have made millions by investing in Bitcoin, you might be thinking of cashing out your token. Here, we have created a complete guide on how to sell Bitcoin and how to withdraw Bitcoin to understand the full potential of your token. There is more to know about how you can use your cryptocurrency, so let's start!

Key Highlights

  • You can cash out your Bitcoin using your broker or any other centralized exchange like Binance or Kraken.

  • Many peer-to-peer platforms like Binance facilitate faster transactions with individual buyers.

  • While cashing out your Bitcoin, you must consider taxes on profit, exchange fees and the time taken to complete the transaction.

How to Cash Out Bitcoin?

There are not only one or two but many ways to get cash in exchange for Bitcoin. They are mentioned below

1- Use Crypto to Exchanges

Bitcoin is a digital currency that you can exchange for Fiat currency like dollars or euros. Here, the amount you get in exchange for Bitcoin mainly depends on the people who want to buy and sell it. Crypto exchanges like Coinbase, Binance and Kraken are the simpleest ways to cash out your cryptocurrency. It is as easy as clicking the buy and sell button when you want to sell out the portion of your Bitcoin. Using these exchanges, you can easily exchange your cryptocurrency into cash and transfer the money into your bank account. You might also get hit by charges to exchange Bitcoin for cash, ranging from 3% to 10%. The most common complaint while using decentralized exchanges is the fees associated with the transactions. It charges service fees, where the exchange collects a certain amount to cover its business cost. You also need to have a bank account to deposit your cash.

2- Use Your Broker

Your crypto broker can also hold your crypto coins, which you can easily trade against cash. Some of the brokers are Robinhood or Webull, which are extensively used for crypto trading. Here, you can quickly cash out your Bitcoin. Crypto brokers like Robinhood are an excellent option for buying cryptocurrency directly. Other brokers like interactive brokers, Webull, Trade Station and Binance.us are a few common brokers that authorize you to buy and sell digital currencies. However, it would be best to consider the commission these brokers charge and the minimum account requirements for buying and selling your Bitcoin. Robinhood charges zero commission, while interactive brokers charge 0.12% to 0.18% of trade value.

Related Articles: How Can You Buy Cryptocurrencies Using a Credit Card?

3- Peer-To-Peer Trade

You can directly sell your cryptocurrency to another person. Many platforms like Binance facilitate peer-to-peer trading where you can exchange your Bitcoin for cash. You can also do it in person if needed. Binance is a well-known platform for peer-to-peer trade where it releases the crypto to the buyer on the platform only when you receive the money in your account. In peer-to-peer exchange, a transaction occurs between two individuals where buyer and seller interact with each other directly without an intermediary. It is the easiest way to cash out your currency as you set your price. This process involves loading your debit card and selling your currency on a centralized exchange. You can also negotiate to get more cash in exchange for your crypto. However, the only drawback of peer-to-peer exchange is it takes longer than selling on a centralized exchange.

4- Use Bitcoin ATM

Bitcoin ATMs are the easiest way to access cash using your Bitcoin. The most popular one is the California Bitcoin ATM. Here, it is important to understand that Bitcoin ATMs do not operate like traditional ATMs. To make a cash withdrawal or sell Bitcoin, you must scan a QR code to which you send your Bitcoin. When you use a Bitcoin ATM to cash your crypto, the machine creates an invoice from which you sell your crypto at an agreed-upon rate. They are available worldwide and provide a quick and easy way to collect cash in exchange for your crypto without a bank account. The major drawback of using Bitcoin ATMs is they often charge extra fees, which can be expensive compared to other methods. Also, you can only cash out a limited amount from the Bitcoin ATMs.

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What Should You Consider Before Cashing Out Your Bitcoin?

Before you convert all your Bitcoin to cash, you must consider the following

Taxes 

When you make a profit by selling Bitcoin, you have to be taxed on the profit you earn. Third-party brokers or exchanges report their transactions for tax purposes. Therefore, you consider the taxes you pay while selling your Bitcoin.

Transaction Fees

When you convert your Bitcoin into cash, you pay a certain amount in terms of fees or charges. The fees depend on how large or small your transaction is and what method you use.

Speed

Every method is different, and completing the process takes time and effort. For example, peer-to-peer exchange may take longer than cashing out your Bitcoin from any reputable exchange.

Final Words

When you trade or invest in Bitcoin, you receive a value in exchange for it. After making a profit, the first step is to cash out your earned profit. When there are ample methods available to cash out your Bitcoin, it might be quite confusing which one to choose. You might be wondering how to cash out your Bitcoin or sell the Bitcoin you have earned, so we have briefly reviewed each method to understand which method suits your needs. 

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Win Harrison 23 Feb, 2024

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