How To Cash Out Bitcoin - Step By Step Process (Jul 2022)

Bitcoin is an immensely popular cryptocurrency in the market currently. However, it is also difficult to mine and volatile in price since it is decentralized and not regulated by a centralized bank or government. But, if you own Bitcoin and want to make a profit out of your Bitcoin by selling it, you may need to convert your Bitcoin to cash for buying real things.

There are numerous options available for you to cash-out Bitcoin, such as peer-to-peer exchanges or through third-party exchanges, bank transfers, PayPal, or cash deposits. You can check out all the options before opting for any method.

In this tutorial, you will learn:

• How to turn Bitcoin into Cash using Binance P2P
• Why Transfer Bitcoin to Your Bank Account?
• Factors to consider when cashing out Bitcoin
• Other Methods to Cash in Bitcoin:
• Method 1: Using a Cryptocurrency Exchange
• Method 2: Using Peer-to-Peer Exchange
• Method 3: Using Bitcoin debit cards:
• Method 4: Using Bitcoin ATMs

How to turn Bitcoin into Cash using Binance P2P

Here is the step-by-step process to turn Bitcoin into cash:

Log in or Sign up using your credentials and verify your account details

1. Select Sell
2. Select BTC
3. Select the fiat currency you want to cash out for. For example, if you are located in Russia, select Rubble. Here, we have selected USD.
4. In Payment mode, select Cash in Person

Why Transfer Bitcoin to Your Bank Account?

The idea behind transferring Bitcoin to a bank account is that it will be able to replace traditional currencies. Nowadays, more people are investing in Bitcoin as they view it as a commodity that will grow in value over time as the demand for Bitcoin is increasing day by day.

If you have Bitcoin, you may want to hold on to it for that reason. However, you can make a good profit if you ‘sell’ your Bitcoin now and transfer an equal amount of money into your bank account.

There might be a time when you will be able to use Bitcoin for any purchase. For now, there are only a very few businesses and individuals who accept payments in Bitcoin. That is also a reason you may want to convert your Bitcoin to buy physical things.

Factors to consider when cashing out Bitcoin

Here are some crucial factors to consider when cashing out Bitcoin:

Transactional costs on P2P platforms:

P2P platforms allow you to trade hundreds and thousands of dollars in crypto. However, P2P platforms also have very low transactional limits and very high transactional fees. This may eat a sizeable amount when trading millions or a moderate amount of dollar value in Bitcoin. For example, you can’t trade beyond $1000 per day on most peer-to-peer(P2P) exchanges. Binance P2P however, has no transactional fee on its P2P as well no limits.

Restrictions on trading and withdrawal amounts:

You can trade Bitcoin using peer-to-peer trading. However, cashing out a large amount of Bitcoin comes with certain restrictions on daily withdrawals on many third-party crypto trading platforms. Also, the possibility of scrutiny can’t be denied.

Practical limits for daily trading are also imposed when crypto trading with different payment methods. For example, the trading limits on LocalBitcoins is a maximum of 200,000 Euros per year for tier 2 KYC verified done. However, Tier 3 verified accounts may not have any specific limits imposed.

Regulatory scrutiny:

Cashing out Bitcoin can create a considerable amount of wealth. That’s why large transactions certainly attract the attention of banks when done using that system. So, it is likely that those bank accounts may get blocked out because of suspicious money laundering activities.

Taxes:

In countries where capital gains are taxable, cashing out or selling any size of the crypto would be counted for tax reporting. It is not always an issue for traders or holders with negligible sums.

However, large investors and corporate giants face such issues when trading large amounts of cryptocurrencies. They may have to pay huge sums in taxes where capital gains are taxable.

Speed:

Third-party broker exchanges might take at least two days to transfer the money to deposit into your bank account. So, you should select an exchange where you can turn your Bitcoin into Cash in a fast and reliable way.

Other Methods to Cash in Bitcoin:

Here are different ways to cash-out Bitcoin:

Method 1: Using a Cryptocurrency Exchange

A crypto exchange is just another name for a third-party broker. Many cryptocurrency exchanges don’t allow you to deposit funds using fiat currency. However, some of them do.

You need to deposit your Bitcoin in the exchange. Once the exchange has received Bitcoin, you can immediately request a fiat currency withdrawal. The widely used method is to use a bank transfer.

However, you need to make sure that you do not break money laundering laws. You must withdraw the amount to the same bank account that you deposited with earlier. However, if you have never deposited fiat onto a broker exchange, you should first make at least one deposit.