Are you planning to cash out all your hard-earned, bought, mined or gifted Bitcoin? A few years ago, it would seem impossible, but today cryptocurrency is more popular than before, meaning that we have broadened our access to digital money.
So after a great journey of being introduced to Bitcoin, you’re ready to cash it out. You’ve come to the right place. This guide will show you different methods of cashing Bitcoin out. You will be able to find the one that best suits you and is comfortable to use.
Note: To avoid confusion, selling Bitcoin and Cashing out Bitcoin is the same concept expressed with different words.
Cash-out Bitcoin on an exchange platform
Pros: easy-to-use, online, extra features, can deposit on PayPal
Cons: long waiting time
Briefly about the process:
- Find and register on a trusted exchange platform
- Follow the verification process
- Add your bank account or debit card to fiat wallet (if asked you might need to deposit a small amount first to verify the bank account)
- Sell your Bitcoin into fiat wallet and transfer it to your bank account
This method is comfortable for exchange platform users and for those who plan to proceed with other features of the platform.
It might be a bit long in time, but it’s one of the safest methods there is.
How it works:
- Withdrawal method: Sell BTC to fiat and withdraw it on the bank account that you’ve already used to buy crypto on Coinbase.
- Fees: Fees vary; A wire transfer is $25; SEPA transfer is $0.15
- Cash-out times: US 4-6 days; EU 1-3 days.
Coinbase is one of the major cryptocurrency exchange platforms. Cashing out your Bitcoin using Coinbase can take some time, but it’s worth the wait.
First, you need to register on the platform and verify your email address and identity. It’s necessary if you want to proceed with financial activities.
Once you set up your profile, go to settings, and then linked accounts. Press the button “Link a New Account,” and follow the steps. Once you’re done with this task, you will already have your bank account linked to Coinbase platform.
Coinbase usually requires a small amount deposited on the fiat wallet to verify the account. It’ll take a few minutes, but in the end, you’ll be able to cash out your Bitcoin.
It’ll typically take 1-5 days for your money to reach your bank account.
If you’re not a fan of Coinbase, you can use other exchange platforms that allow selling BTC to fiat:
Cash-out Bitcoin with Bitcoin ATM
Pros: high security, easy-to-use
Cons: not very accessible everywhere
How it works:
- Withdrawal method: depending on the ATM, you can either withdraw cash directly or send it to your bank account.
- Fees: Vary depending on the ATM type
- Cash-out time: Immediate
Bitcoin ATMs are wonderful machines that have eased many crypto lovers’ lives. They look like regular ATMs, but instead of getting the money you can buy/sell cryptocurrency.
There are different types of cryptocurrency ATMs:
- Genesis1 Bitcoin ATM
- Satoshi1 Bitcoin ATM
- Satoshi2 Bitcoin ATM
- Lamassu Bitcoin ATM
- Lamassu with Santo Tirso
- BATM2 Bitcoin ATM
- BATM3 Bitcoin ATM
- BitAccess Bitcoin ATM
- BitXatm Bitcoin machine
- Robocoin kiosk
- Skyhook bitcoin machine
Don’t be confused and alarmed. The process of buying and selling Bitcoin is practically similar for each.
There’s a chance that a Bitcoin ATM is near you and didn’t even know. Use this Bitcoin ATM map to track nearby ATMs and buy/sell your BTC as you please.
Get a Bitcoin debit card and cash your Bitcoin out
Pros: physical form, small and easy to use, can use everywhere
Cons: limited currency, limited country use
Another way to get physical money in exchange for your Bitcoins is a Bitcoin debit card.
What is a Bitcoin debit card? It’s quite easy to explain. It’s a debit card that holds Bitcoin. You know? Like you have for real money.
You can use Bitcoin debit card to pay for goods at any store and even cash out the money.
BitPay Debit Card
Pros: trusted company, no transaction fees, support other currencies
Cons: limited use by country (only US), limited currencies (only BTC)
How it works:
- Go to BitPay website and register
- Order a card by indicating your country of living (you will need to have a Bitcoin wallet to continue).
- Indicate your personal information.
- You will need to pay $9.95 in Bitcoin and wait around seven days for the card to arrive in your mail.
- Use your debit card at an ATM to cash out Bitcoin.
BitPay Debit card is available for US citizens only, but the platform is working on popularizing it throughout the world.
The card costs about $9.95 in bitcoin and has no further fees. Good news is that BitPay card supports Bitcoin (BTC), Bitcoin Cash (BCH), Gemini Dollars (GUSD), USD Coin (USDC) and Paxos (PAX).
Tenx Debit Card
Pros: Low fees, support multiple cryptocurrencies, has physical and virtual cards
Cons: limited usage by country
How it works:
- Go to Tenx website and register.
- Pay for the flat fee of the card and wait for the delivery of the debit card.
- Use ATMs to cash out Bitcoin.
Tenx Debit card is another great example of how you can use a physical debit card to pay for goods with Bitcoin. Tenx is available in Australia, Hong Kong, Malaysia, New Zealand, and Singapore.
You will need to pay $15 to get a physical card or $1.5 for a virtual card. Maintenance consists of $10 per year. ATM withdrawal fee is $3.25.
If you want to learn more about Bitcoin debit cards, you should read our guide on The Best Bitcoin Debit Cards.
Sell your Bitcoin to a peer
Pros: Safest and most anonymous method, can negotiate about the price
Cons: need to be cautious about scams and fraud
How it works:
- You can find an individual who wants to buy Bitcoin on LocalBitcoins.com, Bitcointalk.org, Reddit, or sell it to your friend.
- Ask for the ID and other identification documents if you’re selling to a stranger.
Selling Bitcoin to a close friend of yours or a completely unfamiliar individual is another way to cash out your crypto.
You can go through cryptocurrency forums like BitcoinTalk.org and find peers who are looking for best Bitcoin offers. You can also use Reddit and other platforms that are dwelling with crypto users.
Another option is to use LocalBitcoins.com and find someone who wants to buy Bitcoin near you.
Pros: secure and private, no buy/sell limits, established platform
Cons: caution to avoid fraudsters
How it works:
- Go to LocalBitcoins.com and sign up for free.
- Use their search engine to find a perfect match for you.
- Sell your Bitcoin via cash deposit, wire transfer, or personal meetup with cash.
LocalBitcoins is a great place to sell your Bitcoin anonymously, but be aware that there are malicious users as well.
Go to their website, and once you’re done with signing up, you can search for your perfect buying match via their detailed search engine. Input the amount you want to sell and the currency you want in exchange. You can also search by country and if the offer is online of physical.
If you were invested in our guide and read everything we advised, you should be ready to go out there and sell your Bitcoin.
Be cautious, choose the right platforms and peers, and sell your cryptocurrency with high profit.
Updates/Developments – 22 Nov 2019
- The country you come from plays a big role when it comes to deciding how best to cash out Bitcoin, especially if you want to pay out larger amounts.
- If you live in Germany, then the payment is tax-free if you sell Bitcoin more than one year after purchase.
- If you buy Bitcoin and sell it within one year, taxes will be due, in full according to the personal progressive tax rate (income tax).
- So the capital gains tax does not apply – contrary to what many people suspect. Depending on the amount paid out, it can, therefore, happen that the maximum income tax rate applies: about 43%.
- In the USA for instance, selling Bitcoin always triggers a taxable event, no matter how much time there was between the purchase and the sale. However, time matters when it comes to the amount of taxes you have to pay:
- If less than 1 year has passed since you bought Bitcoin, you have to pay short-term capital gain taxes on the disposal.
- If more than 1 year has passed, long-term capital gain taxes are due. In both cases the tax can be quite substantial and those affected likely wonder if there might be a way around these levies.
Bitcoin Taxes in the USA:
- Short-term capital gains tax: falls into income tax, like additional income, so is subject to the individual income tax rate
- Long-term capital gains tax: Depending on income class, 0 – 20%.
How To Get Cash for your Bitcoin without paying Taxes?
- If you sell Bitcoin on a cryptocurrency exchange and then have the money paid out, this is always a taxable event (e.g. USA, Germany, others).
- Whether by bank transfer, credit card or Paypal, there is a transaction that is visible and on which taxes may be due. Thus, the way over an exchange, from which you get the money paid out, is probably not what you seek.
- The first way to get cash for Bitcoin, and avoid taxes, would be a private exchange off the books. All you have to do is find someone who can bring enough cash and is willing to do it without KYC / ID.
- But in many countries, this is, of course, a form of tax evasion and not advisable. Besides, the biggest challenge would be to find someone like that.
Leave your Country and cash out Bitcoin abroad
- One option is to leave your country permanently and cash out your Bitcoin in another country afterward.
- In principle, it’s possible to live as a nomad without fixed residency, as an earth resident so to say.
- In this case of a state-independent existence, you wouldn’t be taxed anywhere. Provided you’re never too long in one place.
- In each country, there is a certain period of residence from when you become taxable.
- Therefore, 3 different locations per year would already be sufficient if you’d spread the time equally, in case you’re not too much into traveling 4 months maximum at a place should be safe.
Cash for Bitcoin – the Smartest Option:
- A much more tricky solution to get cash against Bitcoin are Bitcoin Loans. This means that you would take out a loan with a financial service provider for which you deposit Bitcoin as a pledge.
- So you get a certain amount of money against Bitcoin, and you don’t have to pay tax on this money, because it is a loan. Your BTC only moves temporarily from your custody to the custody of the loan company, and in the end, you get it back.
- A Bitcoin loan in a bull market is particularly advantageous if the BTC price at the end of the loan is significantly higher than at the beginning of the loan.
- Then one would have the possibility of refinancing the first loan with a smaller amount of BTC. In a bull market, you may already be able to get a portion of your BTC back during the loan term, depending on how far the price would have risen.
Find out more about Bitcoin backed Loans
How do I transfer Bitcoin to my bank account?
First, you will need to have some Bitcoin and register on an exchange platform (Coinbase, Kraken, etc.).
You will need to link your bank account to your exchange account and sell your Bitcoin in fiat money (e.x USD). Once your balance shows that you have USD, you can transfer that money to your linked bank account.
Is it easy to cash out BTC?
It’s quite easy to cash out Bitcoin if you follow our guidelines.
You can cash out Bitcoin with:
- Exchange platform
- Bitcoin ATM
- Bitcoin debit card
- P2P selling
It takes only a few steps to cash the Bitcoin out, and you’re flexible in choosing the methods.
How do I cash out with PayPal?
To cash out the BTC with PayPal, you can use:
On Coinbase, add your PayPal account to the linked accounts and select buy/sell option. Select the amount of crypto you want to sell (select the fiat currency, USD or EUR) as well and choose the destination to be PayPal.
On LocalBitcoins, you can find a peer who will accept your Bitcoin and transfer funds on your PayPal.
How long does it take to convert Bitcoin to cash?
It depends on the method you’re using and the country you live in.
- Cashing out Bitcoin from Coinbase will take around 3-4 days if you live in Europe and 5-8 days if you live in the US.
- Bitcoin ATM is almost immediate (depending on the type of the ATM)
- Bitcoin debit card is also quite fast. You can use ATMs to cash your Bitcoin out in a few minutes.
- P2P selling can take a few seconds or several weeks, depending on how you agree to exchange the goods and what platform you use to receive money.