If several years ago you made a decision to buy some Bitcoins, while others doubted whether it is worth investing in or not, then today you can already reap the benefits from that wisely made decision. To be able to spend your crypto assets you should learn the methods of cashing out Bitcoin. In this guide, we’ll review the main methods of Bitcoin (BTC) cash out.
But before learning how to turn your Bitcoins into cash, let’s take a quick look at some things that should be taken into account:
- If you’ve been in this industry for a while, then you most likely know that almost all crypto transactions are subject to commission fees. BTC withdrawal is not an exception.
- Unlike instant crypto-to-crypto exchanges (like the ones provided by Changelly), withdrawing bitcoin on a cryptocurrency exchange may take some time. Therefore, if you need money here and now, you should pay attention to other ways to withdraw BTC, such as peer-to-peer platforms, or using an ATM.
- Every day, new legislative initiatives appear aimed at regulating the cryptocurrency market. Therefore, before starting to cash out your bitcoins, you should familiarize yourself with the local laws that regulate the cryptocurrency market in your country.
The preference in choosing a method for bitcoin withdrawal may also depend on the amount of BTC that you plan to convert into fiat currency. In case the transaction amount is large, you may need to personally notify the bank about this operation in order to avoid the funds on your bank account being frozen.
Now that we have discussed the preparation stage, it’s time to move on to the most popular methods of cashing out bitcoin. Let’s go!
Cash Out Bitcoin on an Exchange
Firstly, you need to decide which exchange to use for crypto withdrawal. Though to date, there are not that many exchanges that allow their users to cash out BTC, there are a few popular crypto exchange platforms (such as Kraken or Bitstamp) that offer this feature. Usually, whole cryptocurrency exchange process is quite easy.
The process of BTC withdrawal on an exchange generally includes the following stages:
- If you haven’t created an account on an exchange, you’ll definitely need to do that. Please note that when creating an account on an exchange platform you will be subject to passing a verification procedure.
- After entering the account you will probably need to make a fiat deposit. This is essential as it helps to ensure that the process of linking your bank account to an exchange account was a success.
- Now that you have created an account and made sure everything is set up correctly, you need to top up your crypto exchange account with Bitcoins.
- Once BTC has reached the account, cash it out to your bank account which has previously been linked. After they are there, withdraw the desired amount to your bank account and wait for the funds to show up. Keep in mind that it can take from one to five days for the funds to be available.
Now let’s overview the transaction details such as timing and charges using the example of Kraken crypto exchange.
As we’ve already mentioned above, withdrawing BTC from crypto exchange to a bank account is not instant and can take up to 5 working days. So be patient.
Fees that you’ll pay for cashing out BTC can vary depending on the chosen bank account. It also varies on exchange platforms, with Kraken offering low withdrawal fees if you have a SEPA bank account (for EU residents only). It will cost you only 9 cents per withdrawal. In the case of using a US bank account, the fee will be $5 which is still not much. When using other exchanges, the fees may vary between $1 and $25. Nevertheless, the fee amount is generally fixed and publicly available, so it won’t come as an unpleasant surprise.
Crypto withdrawal limits
If you wish to withdraw crypto on Kraken, you need to upgrade your exchange account to tier 2. The daily fiat withdrawal limit is set to $100.000, while the crypto withdrawal limit exceeds $500.000. If you wish to withdraw a larger amount of money, you can do that from several exchanges to a single bank account. But first, make sure that the bank won’t freeze your account for suspicious activity.
Peer-to-peer is a type of trading that happens directly between two individuals. This type of exchange is also known as off-exchange trading. If you wish to cash out Bitcoin anonymously, then this option is for you. But be careful, since the other party also stays anonymous, make sure they’re not a scammer. To protect yourself use the right p2p platforms and also take your time to research a person on the opposite side of the deal.
Among the most trusted and popular peer-to-peer platforms, there are Localbitcoins and Paxful. They have pretty similar operation methods and are available in almost every country in the world.
The main page of Localbitcoins.com
Another major plus of using p2p platforms is a variety of payment methods to choose from, whether it is a bank transfer, or a cash deposit, or a personal meeting for cash. Whatever option you choose, make sure to protect yourself by requiring proof of identity and proof of payment from the buyer. After all, the P2P method of selling Bitcoin is quite safe if you are aware of every stage of this process. For instance, a high level of security on Localbitcoins is ensured by its escrow service, meaning that a buyer will not have access to your Bitcoin until you confirm the arrival of funds to your bank account.
Consider an example where you want to cash out 1 BTC through Localbitcoins. To do that you need to create an account on the platform. Once you set up an account start looking for a person to sell your Bitcoin to. Make sure the buyer accepts a transfer to a bank account as a payment method. Then send your request to this person. Once the buyer approves your selling request, you can put BTC into the escrow and they can send the agreed amount of fiat to your bank account. Almost done. All you have to do is wait for the arrival of funds and then unlock BTC from the escrow. Congratulations on successful BTC withdrawal!
Bitcoin Cash Out via ATM
Probably the most instant way to cash out BTC is by using a bitcoin cash out ATM. Also, this withdrawal method is likely the most familiar for the majority of crypto hodlers since modern people interact with traditional ATMs on a daily basis. BTC ATMs are pretty similar to their “traditional brothers”: as with regular ATM you need to own a bank card where to withdraw fiat currencies (i.e. USD, EUR, GBP, etc.) in exchange for BTC you hodl.
A big advantage of Bitcoin ATMs lies in anonymity. Given the fact that you don’t need to create an account and pass verification, withdrawing BTC via ATM is the best way to secure your identity.
However, if willing to stay completely anonymous, be ready to pay extra. In the case of ATMs, the withdrawal commission can reach 10% of the withdrawal amount. If you are okay with it, time to find an ATM in your neighborhood.
How to find a bitcoin cash out ATM near you
The number of crypto ATMs keeps growing every single day. However, there’s still not much presented on a global scale. The easiest way to locate a Bitcoin ATM near you is to use a crypto ATM radar application. Such applications usually provide the ATM location along with other details such as fees, limits, availability of Buy/Sell options.
Bitcoin ATMs global map
Once the ATM is found, all you have to do is execute the withdrawal itself. Here’s how you do that:
- Pick the option of cashing out BTC on the ATM’s screen;
- Set the withdrawal amount;
- Send BTC to the crypto address provided on the screen. Make sure you have a QR-code reader on your mobile phone, because entering the address manually is not a good idea;
- Receive your cash.
Other Ways to Withdraw Bitcoin
You can also cash out Bitcoin by using instant crypto exchange services such as Changelly. The option of BTC withdrawal is available for the owners of a SEPA bank account which allows them to convert Bitcoin into Euro. To get more details on this option, feel free to read this guide on selling crypto.
“Sell crypto” button on Changelly.com
Last but not least, another option for Bitcoin withdrawal is to use a decentralized peer-to-peer exchange such as Hodl Hodl. The main working principle of such exchanges is pretty similar to regular peer-to-peer platforms like Localbitcoins. However, there are differences that need to be mentioned.
As we’ve already said, traditional p2p exchanges offer to keep users’ funds in escrow while waiting for delivering fiat to a seller bank account. In the case of decentralized p2p exchanges, Bitcoin escrow is held in a multi-sig smart contract in a non-centric manner, thus providing a higher security level.
Another major difference in cashing out Bitcoin through decentralized exchanges lies in users’ anonymity, meaning that only you decide whether to provide personal data or not. Simply put, such exchanges are totally anonymous. In this regard, this type of exchange service will likely replace centralized ones. It’s just a matter of time.
Now that you’ve read this material, let’s go over the major points once again.
- There are three main options to cash out BTC to date. Each one is appropriate to a particular use case and depends on what you need the most at that moment: to stay anonymous, pay fewer fees, or make the withdrawal instantly.
- Before getting started don’t forget to inform your bank and examine the tax and legal aspects for BTC cash out operations in your country.
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