Bitcoin was heralded as the currency of the future by a small group of enthusiasts when it first appeared, who predicted it could become an alternative form of money that would replace centralized fiat money for good. This seemed like a fringe dream at first, as mainstream financial institutions continued to ignore Bitcoin for the most part.
But growing interest from people around the world soon made Bitcoin impossible to ignore as it led the dawn of cryptocurrencies to the world of finance. Cryptocurrencies in general and Bitcoin, in particular, have become really popular over the years, with more people and businesses adopting digital currency.
Nowadays, Bitcoin has many use-cases. It can be used to purchase products and services from around the globe, it has become an investment asset people can hoard and finally, you can make money from trading Bitcoin. These are all possible because Bitcoin can be exchanged for fiat currencies (like USD, AUD, EUR). For those of you who are not sure how to do this, we’ve prepared this guide to help you understand how you can cash out your Bitcoin!
Why Sell Bitcoin (BTC) for USD?
You might choose to convert Bitcoin to USD and other fiat currencies for several reasons depending on your particular circumstances and investment strategy. While some Bitcoin holders (HODLers as they are often referred to) prefer to hold onto their Bitcoin for as long as they can because they believe the value of Bitcoin will shoot upwards in the long term, cryptocurrency traders often oscillate between buying and selling Bitcoin for cash, in order to take advantage of Bitcoin price volatility. Price volatility allows traders to buy Bitcoin when prices are low and sell it when prices increase.
You may also want to sell Bitcoin for other reasons. While it has become possible to use Bitcoin to purchase goods and services around the world, Bitcoin is still not accepted as a universal payment method by many retailers. Investors may wish to sell Bitcoin in order to earn cash and use the money to make different purchases. So you may wish to sell your cryptocurrency assets to receive fiat money like US dollars or Euros in your bank account to use as you wish.
How to Cash Out Bitcoin and Other Crypto Assets
You can easily exchange Bitcoin for USD and other fiat currencies and transfer your money to your bank account using several methods. One of the most common ways to cash out Bitcoin is using a cryptocurrency exchange that allows you to buy and sell crypto assets for fiat currency. Most Bitcoin exchanges allow you to cash out altcoins as well, so if you have a diverse cryptocurrency portfolio, this might be the best option. Other options include selling Bitcoin offline or using Bitcoin ATMs to convert Bitcoin to your local currency, but these are harder methods as they require time and patience.
Let’s go over these methods of cashing out Bitcoin and discuss their advantages and drawbacks, so you can choose the best way to convert bitcoins into your local currency.
Convert Bitcoin via Cryptocurrency Exchange
Cryptocurrency exchanges are platforms that allow people to buy, exchange or cash out crypto assets. Popular crypto exchange platforms like Binance, Coinbase and Kraken are centralized exchanges that allow people to buy and sell cryptocurrencies for fiat money. You can typically buy and sell multiple cryptocurrencies (like Ethereum and Litecoin) on these exchanges as well as Bitcoin.
Centralized cryptocurrency exchanges use order books to match up crypto buyers with sellers. When you want to sell your Bitcoin, you simply place a sell order on the crypto exchange, and you receive your money as soon as your order matches with a buy offer. Crypto exchanges are regarded as the fastest and easiest way of selling Bitcoin because you can immediately cash out due to high liquidity on the platform (though this might vary depending on the specific platform).
In order to sell cryptocurrency on a crypto exchange, you will have to open an account on the exchange platform. Cryptocurrency exchanges that support crypto-to-fiat withdrawals usually require customers to complete an identity verification process in order to prevent money laundering and other financial crimes. The ID verification process usually includes providing your name, phone number and proof of ID (such as a driver’s license) to the platform. After you complete the identity verification process, you can connect your bank account to your exchange account and easily cash out.
Most global cryptocurrency exchanges offer withdrawals in multiple fiat currencies such as AUD, USD, EUR, GBP or CAD as well as the local currency of the region you are transacting from. Keep in mind that most cryptocurrency exchanges apply withdrawal fees, so make sure you pick a trustworthy cryptocurrency exchange with low fees if you are going to convert a large amount of Bitcoin.
You can also sell your Bitcoin through a peer-to-peer (P2P) crypto exchange. Peer-to-peer platforms are like marketplaces where individuals can create advertisements to buy and sell Bitcoin and other cryptocurrencies. Peer-to-peer exchanges facilitate direct sales between crypto buyers and sellers. Customers can create ads to sell their digital currencies, name their price and the preferred payment method.
One of the most popular and well known peer-to-peer exchanges is LocalBitcoins. LocalBitcoins has an escrow service that provides security to buyers and sellers, as the escrow service makes it possible to ensure that both parties receive their funds. You can pick several different payment methods with LocalBitcoins, including PayPal or bank transfers. In many cases, you may receive a better exchange rate from an individual buyer on a peer-to-peer exchange, than through a third-party exchange platform.
Selling Bitcoin in Person
You can also sell Bitcoin face-to-face (F2F) at a physical location. You can find a buyer for your cryptocurrency through local exchange websites such as Localcoinswap and LocalBitcoins. You can create ads and find people willing to buy Bitcoin for fiat currency in person through these platforms and other online groups. In most circumstances, you won’t be asked to present identification papers or wait for a verification time. You will only need to search for a local buyer who will pay with cash and set an exchange meeting with them. You can send the agreed-upon amount of Bitcoin to their Bitcoin wallet address after you accept the cash payment in person. Make sure you both agree on a set exchange rate before you finalize the sale.
When you are conducting Bitcoin sales in person, there is a likelihood that you will be paid in your local currency. You should also be aware that selling Bitcoin in person can be a little risky, as you are dealing with strangers. Make sure you take appropriate security measures like conducting the exchange in a public place, such as your local coffee shop, or asking a friend to come with you.
Bitcoin ATMs are another way to exchange Bitcoin for fiat currency. You can use a Bitcoin ATM to receive cash in exchange for your Bitcoin. Using a Bitcoin ATM is relatively simple, especially if there is a local Bitcoin ATM in your region. Different Bitcoin ATMs have different identity verification requirements, so you might be asked for an ID, phone number or a finger print in order to exchange Bitcoin.
While Bitcoin ATMs are easy to use, there is a downside to this method, as ATMs charge higher transaction fees than cryptocurrency exchanges. The exact exchange rate varies between %7 and %20, depending on the Bitcoin ATM operator. Bitcoin ATMs have withdrawal limits as well so you may have to visit an ATM several times if you are selling large amounts of Bitcoin.
You can check here if there is a local Bitcoin ATM close to where you live.
Bitcoin Debit Cards
As Bitcoin and other cryptocurrencies are gaining more mainstream clout, some payment companies and exchange services like Binance and Coinbase also started to offer Bitcoin debit cards that you can use to shop for goods and services. Bitcoin debit cards are linked to your Bitcoin wallet addresses and they automatically convert Bitcoin to cash when you are shopping.
A Few Words Before You Go…
These days it is very easy to convert your digital assets on the blockchain to money in your bank account. One of the most convenient ways of exchanging Bitcoin for USD is using a centralized cryptocurrency exchange that offers crypto-to-fiat trading pairs. If you are a crypto beginner, you will find that this is the most convenient option to exchange your crypto assets for cash. You can also create ads on a peer-to-peer exchange to sell Bitcoin, or use a local Bitcoin oriented social media page to exchange bitcoins face to face. Finally, you can use Bitcoin ATMs to convert your Bitcoin to USD, though this is the most expensive option as Bitcoin ATMs charge higher brokerage fees.