Now that you have your bitcoins with you, how are you planning to turn them into cash? There’s no need to worry. Bitcoin (BTC) has been in the cryptocurrency industry for over a decade, and different countries and sectors of the economies have already embraced digital currency. Meaning, you can convert your bitcoins to cash easily in different ways.
What Are The Reasons For Transferring Bitcoins To A Bank Account?
Many people have invested in bitcoin, based on the idea that this digital currency will replace physical currency. The bitcoin experts project that you will be able to buy goods or services using the BTC in the future, and you will not need other popular currencies such as the U.S. dollar.
Currently, very few businesses around the globe accept bitcoin payments. Probably, this is the reason you’re looking for ways to convert your bitcoins to cash. Besides, the fear of the bitcoin market decline could also be behind your decision to change them into the usual currency. For instance, if you think the bitcoin price may keep shrinking in the coming days, it could be wise to convert the digital currency as soon as you can.
How To Convert Coins (BTC) And Transfer Them To Your Bank Account
You can use various ways to convert your cryptocurrency into cash and transfer the money to your bank account.
1. Sell Your Bitcoin On A Cryptocurrency Exchange Platform Like Kraken Or Coinbase
Selling your bitcoins is one of the best and easiest ways to convert digital currency into cash. Once you have sold the BTC, withdraw the money directly to your bank account. However, to ensure bitcoin brokers don’t break the money laundering laws, withdraw the money from the same account you deposited with.
However, the time taken for your money to reach the account may vary from one location to another. For instance, it might take 4-6 days to get your money for U.S residents.
Coinbase is amongst the most well-known bitcoin broker platform with a massive 13 million customer base and allows huge cryptocurrency transactions. Here are the steps for joining the platform;
- Sign up by filling a simple digital form and completing the verification process.
- Deposit bitcoins to the account. You can buy the BTC from sellers on the platform if you’re a new user.
- Then you can cash out the bitcoins through PayPal or bank transfer.
2. Bitcoin ATMs
BTC ATMs are pretty different from traditional ATMs, which allow users to withdraw money from bank accounts. Bitcoin ATMs are physical locations to buy and sell bitcoins using fiat money. There are over 4990 crypto ATMs spread across 76 countries globally.
You can always use the Coin ATM Radar to check out the crypto ATM near you. However, not all machines are the same; the majority only allow small bitcoin transactions and have set withdrawal and deposit limits.
The only disadvantage of using the crypto ATM is the high transaction fees which range between 7-12% of the amount involved.
3. Bitcoin Debit Cards
There are various websites where you can sell your BTC and get a prepaid debit card like traditional debit cards. All the BTC debit cards are either powered by Mastercard or VISA. That means you can easily use the card for physical or online shopping anywhere globally. Besides, the debit cards can make cash withdrawals at any ATM that supports Mastercard or Visa.
4. Peer-to-Peer Transactions
If you need quick cash, the easiest way is to sell your BTC to your peers. Peer-to-peer platforms where you can sell your crypto for cash. The platforms allow the seller and buyer to agree on the payment method they would like to use:
- Cash Deposit: you’re free to ask the potential buyer to deposit the money directly to your bank account. Remember to ask for transaction proof such as ID before sending the Bitcoins.
- Bank Transfer: the buyer can also transfer the cash directly to your bank account using other payment options like PayPal. Don’t send the bitcoins before the buyer shows you proof of the transaction.
Example Of The Transaction:
Paul is the buyer looking for 1 bitcoin seller; he searches for sellers on the peer-to-peer BTC platforms and finds David, who’s selling the crypto. Paul sends a request to buy David’s 1 bitcoin, and he accepts.
David then uploads the Bitcoin on escrow, which holds it until Paul transfers money to his bank account. Once David receives the cash, he releases the bitcoin on the escrow, then sends it to Paul’s account. That’s it.
Peer-to-peer bitcoin platforms such as LocalBitcoins have over 1.35 million users from 15,000 cities in 249 countries. This platform offers top-notch safety for both buyers and sellers. All the bitcoins are kept on hold until the seller confirms the payment. LocalBitcoins is a free platform and only charges a small fee for those creating adverts to sell their cryptos.
Key Things To Remember When Converting Coins (BTC) To Cash
If you have decided to convert your BTC into cash, it’s always essential to have the following in mind;
- Taxes: Even though some jurisdictions are yet to declare their stand on bitcoin and taxes, you will always be taxed on the profits you make once you sell the cryptos. Paying taxes is inevitable for any investor. Some bitcoin exchange platforms will report you to the taxman when you cash out if you ignore paying the taxes.
- Fees: Most bitcoin to bank transaction methods will charge exchange fees. Unless you’re selling the cryptos to your friends, of course, they may not charge you the transaction fees.
- Cost and method: Converting your bitcoin to cash comes with costs depending on the method you want to use and where you wish to deposit the money on your PayPal or Bank account. The currency type may also be a significant factor. The bitcoin to cash conversion method should also be informed by the time you will have to wait to get the cash and cost implications.
Thus, it’s advisable to understand different ways of converting your coins (BTC) to cash, their advantages, and their drawbacks. Then choose the best option that works for you. Bitcoin acceptance continues to grow, so you will always find a way to convert crypto to cash within your location.
