Let’s assume you have earned a certain amount of Bitcoin and now you want to cash it out. The Bitcoin industry has progressed to the point that there are several legitimate ways of converting Bitcoin into your local currency. In this article, we will discuss some popular methods that might suit your personal preferences, based on the type of service (fast or cheap), payment method (bank account, PayPal, etc.), and currency you prefer.
If you want to understand more about cryptocurrency, take a brief moment to read What is Cryptocurrency?
Convert Bitcoin via Cryptocurrency Exchange/Third-Party Platform
Most of the Bitcoin exchange platforms do not support withdrawals of fiat deposits. However, some of them, like Coinbase, Gemini, Kraken, and Bitstamp, do. Using a third-party exchange is the simplest way to cash out Bitcoin. You can sell your BTC in exchange for USD, EUR, GBP, etc, directly from their user-friendly websites or apps.
The entire process goes as follows:
- First, check which platforms are accepted in your country
- Finish the verification process
- Choose the BTC amount you want to exchange from your account
- Convert your BTC into the selected fiat currency through wire transfer or PayPal.
As simple as it seems, using a third-party exchange is a relatively slow-paced process as it takes 1-5 business days before you get your fiat money. The time mainly depends on the selected platform, your location, and your bank. Moreover, if you haven’t yet set up an account with the platform, you might have to wait for weeks for account approval.
Sell Bitcoin Using LocalBitcoins/ Peer-to-Peer Method
However, if you prefer a faster and rather anonymous way of turning bitcoin into cash, LocalBitcoins is a P2P Bitcoin exchange that enables direct trading between buyers and sellers. It’s available in a wider range of countries than some third-party exchange brokers.
Apart from straightforward communication with buyers, LocalBitcoins provides escrow service to protect each customer from potential fraud. Additionally, the BTC sale price can be determined by the seller. You can also choose your payment method, among options such as wire transfer, cash deposit or cash in-person, PayPal (NASDAQ: PYPL), Western Union (NYSE: WU), gift vouchers, etc.
Briefly, this is how the process goes:
- Set up an account at LocalBitcoins
- Go to “Quick Sell”
- Find your country and pick a payment method
- All available buyers within your location will be listed
- Choose a reputable buyer (LocalBitcoins has a rating system similar to eBay (NASDAQ: EBAY)
- Enter the required information (amount of Bitcoin, payment method details)
- When the buyer confirms your offer, send the selected amount of BTC to the escrow service
- Once you receive the payment, finish the transaction.
What’s most important is that the entire process is free unless you advertise your Bitcoin for sale. In that case, LocalBitcoins will charge you 1% of the transaction amount.
Bitcoin ATM
If it’s inconvenient for you to involve yourself in verification and other multi-step processes, getting cash directly from a Bitcoin ATM is the right solution for you. In general, Bitcoin ATM machines enable you to buy bitcoins with fiat money. Some of them, however, offer you to sell bitcoins in exchange for your local currency.
As for now, there are around 5000 ATMs across 76 countries. You can easily track them with Coin Radar, where you can read all about their distinct services and conditions.
However, only a limited amount of cash can be withdrawn from Bitcoin ATMs ($1000 - $10,000) and what’s more, their fees are drastically higher than other methods of cashing out BTC. Cryptocurrency ATMs will charge you 7-12% per transaction.
Using a Bitcoin Debit Card
Technically, a Bitcoin debit card does not turn your bitcoins into actual cash. You are allowed to add BTC to your card, where your bitcoins are automatically converted into fiat currencies. Therefore, you can pay everything, both online and offline, with your BTC debit card. You are even allowed to take cash at any point where Mastercard (NYSE: MA) and Visa (NYSE: V) are supported.
This alternative has turned out to be quite a convenient solution. Some of the most popular debit cards are Crypto.com, Wirex, Cryptopay, etc. However, have in mind that each of them has different fee systems and ranges of services.
Check out some more about Bitcoin taxes here.
Enjoy your shopping.
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
