How to Cash Out Bitcoin - Bitcoin Price

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What Does ‘Cash Out’ Bitcoin Mean?

Whether you were an early adopter of bitcoin and your 5 BTC investment is now worth a quarter of a million, or you have been making use of cryptocurrency faucets to build up your satoshis (smallest units of a bitcoin), having a balance of digital currency is great for investing and trading – but not necessarily for increasing your day-to-day wealth.

Cashing out your bitcoin or any other cryptocurrency simply means exchanging your balance for fiat (traditional) currency.

Whether you are looking to spend your trading profit or are coming out of digital currency completely, finding the best way to transfer your cryptocurrency balance into fiat currency can save you time and money.

With the right method, you can sell your bitcoin for local legal tender, and it can be transferred to you as cash, through your bank, via PayPal or directly onto a card to be spent like dollars or sterling.

What Are the Advantages of Cashing Out Bitcoin?

A cash-out of an investment is the quickest way to liquidate capital – whether it is tied up in stocks and shares or held in a blockchain.

While some businesses are catching on to the trend for digital currency and allowing some purchases to be made in so-called ‘stablecoin’ (a cryptocurrency that offers price stability because the value is backed by a physical asset), you cannot purchase much with altcoins (alternative cryptocurrencies to bitcoin) and you cannot pay bills.

For some people, the fluctuating cryptocurrency market might be a good reason to cut your losses and cash out for legal tender, but it is important to find out the best way to maximize your return.

Making the change from a digital currency to a more traditional currency is not necessarily straightforward, however, and understanding the different methods that are available will help you make the most appropriate decision for your circumstances.

How to Cash Out Your Bitcoin

Step 1. Consider Cashing Out Through an Exchange

Cryptocurrency exchanges are structured places that allow people and corporations to buy and sell cryptocurrencies, and this makes them great places to cash out your bitcoin.

Centralized exchanges have strict security protocols including identification of both buyers and sellers. They also need to follow strict anti-money laundering (AML) regulations.

Using an exchange to sell your bitcoin or other cryptocurrencies for fiat currency is more of an automated process so it is simple and straightforward – but it can take a while to be completed (usually three to five days).

Because of the AML regulations, you can usually only withdraw funds to the same account from which you deposited originally. This means that you will have to factor in extra time to register and get your account verified, and then make a deposit before you can start the withdrawal process after selling.

1. Coinbase

Coinbase is a well-known centralized exchange that has more than 43 million users across more than 100 countries.

It has a huge range of altcoins, and bitcoin, available to buy and sell. It also allows you to track your cryptocurrency investments while offering excellent education on all things crypto.

Fees include 0.50% of the spread and a charge of $0.99–$2.99 depending on the value of the transaction.

There are also fees dependent on location and withdrawal method. For example, withdrawals to a credit card balance will incur a higher fee.

2. Blockchain

Established in 2011, Blockchain.com was one of the early pioneers of key Bitcoin infrastructure, and today is recognized as the most popular cryptocurrency exchange in the world – supporting more than $1 trillion in crypto transactions.

With 37 million verified users in 200+ countries, the Blockchain.com exchange offers fast trades and low fees – which get even lower depending on the amount you trade.

Fees are structured on a maker/taker basis, which means that both the seller (maker) and the buyer (taker) pay a percentage of the value to the exchange to complete the trade. For low value traders (up to $9,999 in 30 days), this is set at 0.20%/0.40%.

3. Uphold

Uphold was launched in 2015, and since then it has handled more than $4 billion in transactions, trading in 184+ countries with more than 30 crypto.

Uphold allows clients to trade directly between different asset classes in one transaction – so you can trade anything to anything.

With Uphold, you can trade 58 digital currencies, precious metals like gold, silver, platinum and palladium, as well as fractional equities in shares of US companies like Amazon, Tesla and Apple.

Uphold also focuses on Socially Responsible Investing (SRI) by providing an opportunity to trade on carbon tokens for more than just a financial return.

New traders will like the transparent pricing – there are no commission or account fees, and no withdrawal or deposit costs, but the trading fees are built into the spread. Uphold will present a complete price for each trade that includes fees, so you will know exactly what the trade will cost.

Uphold has a quite simple trading platform that is available on the web, as a desktop application, and on mobile.

Uphold also offers a debit card option, where you can pay for goods and services using any asset in your portfolio – and earn cashback as well as crypto on your purchases.

4. Kraken

Kraken is consistently rated as a highly secure exchange, offering many different cryptocurrencies to buy and sell on their marketplace. They are one of the oldest exchanges available and have developed good relationships with traditional banking institutions.

5. Coinmama

Coinmama is an exchange, but instead of being a marketplace that acts as an intermediary between buyer and seller, Coinmama is the buyer or the seller.

In real terms, this means that your transaction is with the exchange itself rather than other users.

Withdrawals are made directly to your bank account.

Commission is 0.1%–0.9% for sell orders, and there is no withdrawal fee.

Step 2. Consider Bitcoin ATMs

A Bitcoin ATM (BTM) works like a normal ATM – except that instead of withdrawing cash from your bank account, you withdraw cash from your cryptocurrency wallet.

Step 3. Consider P2P Exchanges

A peer-to-peer (P2P) exchange works in a similar way to the above-mentioned exchanges but offers more anonymity as it does not need identifying information to complete the transaction.

P2P sales are usually more time-consuming, but they attract lower fees and the prices that can be achieved are generally higher.

P2P exchanges happen between users privately without an intermediary. Although there is an increased risk of scams, in most cases, you will find a rating system based on the online reputation of the other users so you can make a judgment for yourself about how trustworthy they are.