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How To Cash Out Bitcoin – Simple Steps

Since its inception in 2009, Bitcoin has grown exponentially in both popularity and market prcie. Bitcoin market cap has grown to $1 billion this year and attracted even more investors and traders over the past years. Despite a strong retracement over the 2nd quarter of 2021, the market price of a single Bitcoin still remains above $30,000.

Therefore, there are a lot of traders and investors who have increased their holding by a substantial amount since the last major swing low in 2020. In this article, let`s take a look how to cash out Bitcoin to lock in your profits.

Does Bitcoin give you real money?

Once you have made a profit from a price increase you have to withdraw Bitcoin to fiat currency in order to make an actual profit. Over the past years, withdrawing Bitcoin to your bank account has increasingly become easier as long as you fulfill all the required KYC procedures on exchanges.

Alternatively, a P2P platform such as localbitcoin.com allows trading your Bitcoin with another person directly by sending Bitcoin to their wallet address in return for payment to your bank account. This means that you don’t need to be verified on cryptocurrency exchange and can use your local currency to transact. However, these services do usually require to pay intermediary commission and have a higher buy-sell price spread. Using a P2P also offers you to sell your Bitcoin against a cash deposit in a predetermined place in case cash is your preferred selling method.

Further, Bitcoin ATM popularity has also increased over the years. As long as you have Bitcoin at your address, you can withdraw cash at the BTC ATM

Ultimately, the Bitcoin exchange rate is the best on the top exchanges such as Binance or Coinbase as they have large transaction volumes and can offer the best withdrawal fee. For new investors or traders, a Coinbase account is one of the best options as they offer to withdraw to your bank card in case you have used it to purchase Bitcoin or any other crypto asset they offer.

An additional option to realize your cryptocurrency gains is to use a Bitcoin debit card which allows you to transact using the value of your cryptocurrency at the time of purchase. During the purchase, a specific amount of crypto in your wallet is locked in and automatically converted to fiat currency.

Among the first currencies that allowed credit card usage while not selling your crypto first were Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Today, exchanges offer a lot more variety.

Is converting Bitcoin to cash legal?

Selling your Bitcoin is legal in most countries as there are no limitations for buying or selling digital currency. However, keep in mind that capital gains tax is still to be considered just like when investing in conventional assets such as stocks, bonds, or commodities.

Today, practically every major crypto exchange offers to make a bank transfer after you sell Bitcoin and convert it to fiat currency on the platform. From there, the transaction takes anywhere from a couple of hours to a couple of days to be completed.

One of the most popular options has long been Coinbase pro as they offer low commissions, withdrawal fees, and trading fees. However, keep in mind that any reputable third party broker exchange requires a KYC procedure to be completed before you can withdraw anything from the exchange platform.

Additionally, make sure to check your local regulations to understand the sold Bitcoin tax calculations as cryptocurrency trading is applicable to taxation just like gains on trades with any other financial instrument.

How do I cash out 1 million Bitcoins?

When you need to withdraw a substantial amount of currency, an OTC broker is the best option. Over-the-Counter brokers connect large buyers and sellers directly through a semi-private liquidity pool with the broker taking a small commission for their services.

Choosing this option ensures that your transaction does not move the market too much and the transaction itself is not publicly seen unless someone knows your digital wallet address.

Therefore, for a serious Bitcoin investor with a large capital move, OTC is the best option as the transaction fee is worth the pricing you get in return.

How do I transfer Bitcoin to my bank account?

Directly transferring Bitcoin to your bank account is not possible. However, you can sell your Bitcoin to fiat currency and cash it out from there.

As mentioned, to exchange Bitcoin for fiat money you either have to use an exchange, use p2p exchange, or crypto ATMs. The process is relatively simple overall, you sell Bitcoin from your Bitcoin wallet to fiat currency and choose options such as bank transfer to your specified account.

Any reputable and well-established cryptocurrency exchange offers direct bank transfer as it attracts casual traders and investors. Therefore, to transfer Bitcoin to your bank account you need to sell what is in your crypto wallet first.

How do I sell or “cash-out” my cryptocurrency?

There are several options hot to transfer crypto gains to your bank. If you have cryptocurrency stored on your hardware wallet, you first have to move it to cryptocurrency exchange or the p2p platform. From there you can sell Bitcoin and transfer it to your bank account via fiat bank transfer.

How to easily cash out bitcoin

The easiest way to cash-our Bitcoin is via withdrawal on an exchange that you have a full KYC-compliant account on. All that is required is a simple Bitcoin transaction that sells it against fiat currency. From there, select withdraw to your bank account and wait for your money to appear in your account.

Usually, every cryptocurrency with a substantial trading amount offers a relatively low fee for direct bank withdrawal. However, if other payment processors are your preferred option, you can see which offers the one that you prefer. These options can vary dramatically based on where you are located.

How to convert Bitcoin to cash

To convert Bitcoin to cash, the best option is to choose an ATM that offers Bitcoin transactions. The so-called cryptocurrency ATMs are not available everywhere, which is a huge downside. The easiest way to find out whether one is near to you is to use google maps to search pr specific sites like Coinatmradar.com.

These ATMs require you to hold crypto on a private wallet and scan a QR code before the transaction takes place. After it is validated, physical cash gets withdrawn for you to collect.

An alternate method is to find someone on localbitcoins.com or a similar peer-to-peer trading site. From there, find somebody that is located close to you and see the exchange rate that the cash buyer offers.

Once you schedule a meeting, make sure you can transfer Bitcoin or any other cryptocurrency from your wallet to the specified buyers’ wallet. Once the transaction is done, receive physical cash in return.

This method has its downsides as you can get scammed or robbed easily in case a malicious and untrustworthy purchaser does no fulfill his duties.

Key takeaways

To cash out Bitcoin, the best option is to choose a cryptocurrency exchange with a verified KYC procedure as you can simply withdraw money to your bank account. In case this is not possible, there are several other options.

P2P crypto trading sites allow you to trade directly with other buyers and sellers. On these sites, usually, only small amounts of Bitcoin are bought and sold at a single time against fiat currency and they are best suited for beginners.

Additionally, a crypto ATM is also a great option for those who wish to remain semi-anonymous and receive cash in return for their crypto.

That’s it for this guide! For further reading see our articles on how to buy Bitcoin stock, should I buy Bitcoin, as well as Bitcoin transaction steps

This post was last modified on June 13, 2021 10:30 pm

Shawn Du'Mmett

Former IT development and consultant, remote team and collaboration expert, PM, CCO, writer, dreamer, idealist looking to collaborate with global teams on a global teal/turquoise organisation. Shawn's dream is working together openly, to get what writers need and want, and to solve biggest global problems. He is building a collaboration system from the start that everyone can own and define, allowing them to work together, to decide how it works and to their highest ideals.

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