Are you wondering how to cash out Bitcoin to your local currency? It’s not complicated, but it can be a little time-consuming. You can either use peer-to-peer exchanges (P2P) or third-party exchanges. The easiest method isn’t always the cheapest, so you should look into all possibilities before making a decision.
Whether you need USD, GBP, Japanese Yen, or any other currency, there are a few things to know about how to cash out Bitcoin.
Factors to consider when cashing out Bitcoin
Before cashing out your Bitcoin (or any other cryptocurrency), there are some factors you should consider:
- Transaction fees and steps required by each process
- The amount you’re looking to withdraw
- Whether you want to deposit your money into a bank account or PayPal
- The time for the money to reach your account
- Local laws and the currency you need to cash out to
Depending on each of these factors, some methods will be more convenient than others. For instance, if you want to use PayPal to withdraw funds, you’ll need to do some research and identify cryptocurrency exchanges that support this payment platform.
Also, depending on local tax regulations and the type of bank account you own, you may need to call your bank before cashing out a large amount in one transaction, otherwise your account may get frozen.
How to cash out Bitcoin using a cryptocurrency exchange
A common way to cash out Bitcoin is through a third-party exchange, such as Coinbase, Kraken, or Bitstamp. Most cryptocurrency exchanges have reasonable fees and security measures in place to help you turn your cryptocurrency into cash without putting your assets at risk.
First of all, you’ll need to create an account, send the required identification documents, and either buy BTC or deposit BTC into your account. Once the exchange has received your Bitcoin, you can cash out to fiat via a bank transfer.
Note that each cryptocurrency exchange has specific rules for withdrawals, so make sure you go through their policies before depositing your crypto assets.
Most platforms allow you to cash out only with the bank account you used to deposit funds. This means that you need to deposit a small amount of fiat first to be able to make a withdrawal. This step slows down transactions, but it’s meant to prevent money laundering and comply with international AML regulations.
Depending on the platform you work with and your country of residence, cashing out your Bitcoin can take from one to five days. When you change Bitcoin to USD, brokers usually use the SWIFT payment method. For EU customers who ask for withdrawals in euros, payments are made via SEPA.
The good news is that some third-party exchanges accept PayPal withdrawals for both US and EU customers, which speeds up the process.
How to cash out Bitcoin using a P2P exchange
Cryptocurrency exchanges are generally a reliable and secure way of converting Bitcoin and other cryptocurrencies into fiat, but users lack anonymity. Moreover, you don’t have control over prices, and you can’t negotiate transactions.
If you want to learn how to cash out Bitcoin through an anonymous approach with more control over your funds, try checking out peer-to-peer exchanges.
Most of these platforms are secure, even without a central authority governing the network. However, sometimes transactions are more time-consuming and complicated to close.
Some of the most popular P2P exchanges are LocalBitcoins and Paxful. Transactions happen between users privately, with no intermediary. This adds more anonymity to the transaction, but it also increases the risk of scams.
Users can choose from various payment methods, including bank transfers, cash deposits, gift vouchers, Skrill, Payoneer, Western Union, Neteller, and sometimes PayPal. Each method has its own transaction fees and waiting times.
Note that some payment methods allow you to sell Bitcoin at a higher price, depending on how reliable the process is. So, it’s worth experimenting with different tools and apps to maximise your profits.
All you have to do is open an account with any of these exchange platforms, verify your identity, find a buyer, and make a transaction. Most P2P exchanges have a rating system in place, which enables you to choose buyers based on their reputation online.
As a rule of thumb, you should be looking for P2P exchange platforms that include an escrow service. This way, you’ll have your Bitcoin locked until you confirm that the buyer has made payment.
Converting Bitcoin to fiat currency can be a lengthy process. That’s because you’ll need an account with an exchange platform (third-party or P2P) with your bank account or PayPal connected to your account.
Registering and verifying your identity can take a few hours or even a few days. So be sure to get all the necessary measures in place before you decide you want to cash out or you could end up kicking yourself and losing profits.