4 Ways to Cash Out Your Bitcoin and What to Consider Before You Do
Bitcoin is undoubtedly the world’s most popular and most recognized cryptocurrency. From its humble beginnings back in 2009 to creating millionaires less than ten years later, no one could have predicted the extraordinary heights that this currency would reach.
If you’re one of the lucky ones who’s staring at a BTC wallet that’s full of profit and you’re wanting to cash out rather than hold any longer, then we’re here to help. After all, how else are you going to be able to buy your dream car or spend a month in Tuscany if you just sit on your cash?
In this article below, we’ll also look at other areas such as important things to consider before selling so you can determine if you are making the right decision.
How to Cash Out Your Bitcoin
Unlike physical currency, you can’t just pop to your local post office or Western Union any time you feel like converting some money.
Of course, you do have the option to spend BTC online almost like a gift card, if you can find retailers or services that accept this payment method. However, the number of options are still fairly limited.
So realistically, you won’t be able to spend all your currency this way. Especially if you have a large stack built up.
Therefore, the only thing you can do is convert your coins for “real” currency such as USD. The process for cashing out Bitcoin is a little more in-depth.
But, we’ll break it down to make it as simple to understand as possible.
Cash-Out Option #1 - Cryptocurrency Exchange
If you’re wanting to convert your BTC into your local currency then online cryptocurrency exchange is your answer. A crypto exchange is a secure third-party that offers you the way to cash out and sell your bitcoin for “real” money such as USD, Euros, or Yen.
To do this you need to find an exchange service that is available for traders in your country. Options like Robinhood and Coinbase will act as the third-party for a huge number of countries.
However, some services only work with a handful or fewer countries. They are seen as more specialized and you may prefer to use one of these if Robinhood or Coinbase aren’t the platforms you want to use.
Check out the (non-exhaustive) list below of various other options and which countries they serve.
- Bitbns - India
- CEX.IO Broker - Australia, the Bahamas, Barbados, Costa Rica, Ecuador, Egypt, Hong Kong, Monaco, Republic of Korea, the Russian Federation, Singapore, Sri Lanka, Turkey, Ukraine, the United Arab Emirates, and 155 more.
- Independent Reserve - Australia and New Zealand.
- Luno (previously called BitX) - 40 countries are included such as the U.S, Denmark, Finland, France, Iceland, Lithuania, Monaco, the Netherlands, Singapore, Sweden, Switzerland, and the U.K.
- MaiCoin - Taiwan
- OKCoin - This company has offices in San Francisco, Singapore, Hong Kong, Malta, Japan, and Korea. OKCoin can be used in more or less every country in the world.
The Process
Start by setting up an account, you’ll only be able to sell or trade once you have opened the account and verified your identity. Most sites will request a photo I.D such as a driving license or passport to check your age.
You may need to also prove your home address/home country. If you’re charged a small fee to set up the account, don’t worry, this is normal.
Coinbase, however, doesn’t charge users to open an account. For this reason, we’ve used Coinbase below as the next steps.
1) After you have clicked “Get Started” in Coinbase, entered all the required details, and verified your email you can now log in and add more information to your account.
Once you’ve logged in, you’ll be asked to fill in more details such as date of birth, employer, job, source of your funds, and the final 4 digits of your SSN.
2) After this, you may have to verify your I.D through additional email instructions. Once this step is over, enter your payment information into your account. Essentially, which bank account do you want to use to buy/sell/receive money.
3) Now it’s time to share your cryptocurrency address to fill your wallet with Bitcoin. Find an option on the site called Wallet Balance. Then hit Deposit and Currency Type. Here, put in your external wallet address and the amount you want to withdraw. Hit Send, and you’re done. You can then withdraw the money by using the Sell button and sending the money straight to your bank account/preferred payment method.
Don’t forget that once you withdraw the money to your bank, you’re liable for income taxes. Figure out how much this will be and set aside the right money so you don’t accidentally overspend.
Cash-Out Option #2 - Bitcoin Debit Cards
Bitcoin debit cards are the perfect solution for anyone who travels frequently and prefers to use travel cards over their bank cards.
With a Bitcoin debit card, you won’t get cash but you can still use them like you would a regular debit card. Just top the card up with BTC and use the card in shops and make purchases as you would with an ordinary Mastercard or Visa card, for example.
When you use the card, the amount in the card will be converted automatically into what the local currency is, and the correct amount will be taken from your balance.
As a bonus, you may be able to withdraw certain amounts of cash from a regular ATM rather than having to find a Bitcoin ATM. This option will depend on the features of the debit card and cash machine.
So, shop around for debit cards and compare the features before deciding on the one that will be the right fit for you and your travels. Some options to consider are:
- Crypto.com
- Wirex Visa
Cash-Out Option #3 - Bitcoin ATMs
Signing up for online accounts, working through the steps, verifying your I.D, and being at the mercy of the online trader can get frustrating. It’s safe. It’s secure. But it’s not the fastest option out there.
Sometimes, you have an unexpected expense or emergency and you need extra cash fast. For situations like this, you have the option of a Bitcoin ATM.
Since these ATMs have a limit of anywhere between $1000 and $10,000 for both withdrawals and deposits, you might not be able to cash out all of your BTC at once.
However, these limits are in place for safety, plus it’s never a good idea to walk around with bundles of cash in your pockets. Despite these limits, you should hopefully still be able to get enough to get you out of whatever tight spot you’ve got going on.
Finding a Bitcoin ATM Where You Live
As of November 2021, more than 30,000 crypto ATMs are spanning 76 countries. More than half the ATMs available are in the U.S so you shouldn’t have to travel too far to find one near you.
However, keep in mind that there are two types of ATMs - ones where you can only buy, and ones where you can buy and sell. Make sure you find the buy/sell ATM near you.
Fortunately, CoinATMRadar has made it easier than ever to find your closest machine. Just head to their website and put in your zip code or exact location to see all the available options for you.
Take your I.D to the machine with you - and any relevant information. The verification or information required will depend on the ATM itself.
The Process
1) At the machine, you’ll find an option for Withdraw, Withdraw Cash, or something similar.
2) Select Bitcoin
3) Input the amount of money you want to take out
4) The machine will then display a QR code. Scan this on your phone and send your bitcoin to the machine.
5) And you’re done! Your BTC will be transferred and you will receive your cash out of the machine.
However, brace yourself for the transaction fee. You can expect to pay anywhere from 7% - 12% for using a Bitcoin ATM. This can sting, especially if you’re withdrawing a few thousand. Just remember you’re paying for convenience and saving a huge amount of time.
Cash-Out Option #4 - Peer-to-Peer Bitcoin Exchange
A peer-to-peer (P2P) Bitcoin exchange works just as it sounds. It enables you to get in contact directly with buyers. Anyone who wants to buy your Bitcoin can and in exchange, you’ll receive your chosen currency.
One of the biggest advantages of using a P2P exchange is there is no third party. And no third party means no middleman fees. However, for added security, these platforms will still often act as a mediator between you and the buyer to stop fraud.
Like with a cryptocurrency exchange, you’ll need to find a P2P platform that supports your country. A great option for American citizens is BitQuick. On this platform, you’ll also get to use the escrow service which enables safe transactions for you.
LocalBitcoins is a great option for non-Americans as it’s available in every country aside from the United States, North Korea, Indonesia, Syria, and China. Despite it not being available for Americans, other countries can still trade and sell in USD.
The Process - BitQuick
To buy and sell on Bitquick, get ready to provide the following information about yourself.
- Amount of BTC You’re Going to Sell
- Static or Dynamic Price Setting
- Your Preferred Payment Method - Cash Deposit or Cash Pickup
1) Once you have set everything up, you’re ready to find a buyer. Transfer the amount of Bitcoin you want to sell into your account. You’ll be provided with an online wallet that is completely secure. This wallet will act as a kind of escrow.
After you have made the transfer, search for a buyer using location or the preferred payment method. For example, if you aren't interested in cash pick-up, then filter out this option so you don’t waste time.
You can also filter by the buyer's reputation points which can help you feel even more secure.
2) Once you have found the buyer for you, set up all the details and wait for the other person to accept the offer.
3) After the buyer has accepted the trade, they have a few hours to complete the payment from their side of the process will be automatically canceled and you’ll have to find a new buyer.
The Process - LocalBitcoins
With LocalBitcoins, there are 4 trading tiers, each has additional security verification. But, it’ll only take about 20 minutes to open an account.
For the basic account, you’ll need to provide the following:
- Full Name
- Residence Country
- Mobile Number
- Government Issued I.D
For Higher Tiers, you’ll need:
- Know Your Customer Verification
- Check on Home Address
- Proof of Your Residency
- Video of Yourself
Why Do You Want to Sell?
Those above are the four options you have to choose from for cashing out your Bitcoin. However, to help you decide which option is best for you, it’s good to know why you’re selling in the first place.
While you may choose one of the options based solely on convenience. It’s also possible to save extra money on taxes and other fees if you choose the right method based on your current needs.
Emergency Funds
If you’re selling because you need some emergency money fast then a Bitcoin ATM will be the better option. These ATMs are known to charge a higher than a desirable fee, however, you’ll get your money faster this way than any other method.
Fun Money
If you want to cash out just because you want a little extra money in your bank or want to have a little fun then a cryptocurrency exchange is a great option. You’re not in a hurry so you’ll get a better rate than with an ATM.
However, don’t forget you’ll need to include this money on your income tax returns so you can pay the correct taxes.
Highest-Rate Possible
If you want to simply get the highest rate possible for your comics then check out the peer-to-peer exchange. This option lets you work directly with the buyer(s) so you don’t have to pay any transaction or admin fees to a third party.
You’ll also get the option of using an escrow service for extra protection. As well as picking your preferred payment methods such as gift vouchers, bank transfers, Paypal transfers, and cash deposits.
For Traveling
With a Bitcoin debit card you can buy a regular debit card. This type of card is perfect for traveling as you have more control over your budget and you don’t have to use your main account in unknown places.
You can use your card for withdrawing cash from ATMs in any country and be at a lower risk of fraud while traveling. You may incur a few fees along the way such as regular ATM fees but you can look at these like they are currency conversion fees which you would have had to pay anyway if you were converting your own money to a foreign currency.
Are You Ready to Sell?
Before you make the final commitment to selling your BTC, it’s good to ask yourself a few questions first. Particularly if you have made the decision quickly or perhaps haven’t thought of every angle yet. Ask yourself the following questions as they may help in your decision-making.
Have You Achieved Your Investment Goals?
If you bought your Bitcoin for a few dollars ten years ago, then by now, you have more than got back your investment and then some. In fact, in terms of investments, you’ve overachieved.
However, if you joined the party a bit later and paid thousands for your BTC, then stop and think about if your investment is going to give you the return you were hoping for.
What was your goal when you first invested? Have you reached that goal? Can you buy the new car you wanted? Will you have enough for the down payment of a new home? Is it worth waiting if you haven’t hit your goal yet?
Is Bitcoin Making You Anxious?
Investing and trading can get incredibly stressful. You can experience extreme highs and extreme lows over one day.
In the morning you might be ecstatic about how your trade is doing but feel devastated come the evening.
Holding onto assets is a true roller coaster of emotions. And if you’re struggling to handle the suspense of it all, then selling isn’t a bad idea. It’s better to cash out and have a good time than spend another night not sleeping.
Is All Your Money Invested in Bitcoin?
While Bitcoin has made countless millionaires, it’s still not a guaranteed investment. No one could ever have predicted that BTC would go from pennies in 2011 to more than $60,000 in 2021. Likewise, no one can predict if one day, it’s all going to implode and that $60,000 becomes pennies again. For this reason, it’s never wise to have all your money invested in only one asset.
Do You Need the Money?
If cashing out your BTC means you can pay for an unexpected medical bill, credit card fees, or some other debt that is weighing you down, then go for it. While it feels great to let investments be and see where they end up, they’re not worth getting into debt for. Or incurring more debts due to loan fees or late payment fees. You don’t necessarily have to withdraw all your crypto if you don’t need to.
Should You Wait to Sell?
There are questions to ask yourself to see why you want to sell. But, on the other hand, there are also questions to ask yourself to see if you should wait to sell, after all.
Do You Enjoy the Attention of Owning Bitcoin?
Bitcoin is infamous and those who own some can immediately become front and center in any room as others ask a hundred questions. If you’re happy to talk about owning BTC, especially because it can feel like somewhat of a novelty, then why sell if you’re not completely sure? You’ve been part of the story so far, maybe you should wait and continue to be part of the famous BTC story in the future?
Are You Worried About Bitcoin Running Out?
One day, every Bitcoin in existence will be mined. Once miners hit 21 million BTC, there will be no more left. Of course, the 21 million already minded will still be around to trade and exchange but no more new Bitcoin will enter circulation. Having BTC is already starting to become an exclusive club, do you want to leave that club so late in the game?
Final Thoughts
Bitcoin is still very much part of the future. A future that you can easily be part of. If you’re looking to sell your BTC, there are plenty of options above for you. However, if you want to continue your investment or even buy more then joining a mining syndicate is the perfect solution!
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