Since there are a number of places worldwide, where Bitcoin holders may spend their digital funds, knowledge of how to cash out a Bitcoin is equally important.
Can Bitcoin be converted to cash?
Although Bitcoin is a digital coin that has no physical form, it can certainly be converted to any traditional currency. There are several ways how anyone can do that and this article will bring a brief review on any of them.
However, before cashing out it is necessary to evaluate factors like:
- the number of assets you are going to withdraw;
- the fees of withdrawal;
- the type of account (bank or PayPal) where the transaction will be made to;
- how long will it take for assets to reach the account.
- the local bank taxes and fees, that might be applied depending on the bank or the country.
Yet, when you’ve estimated the factors mentioned above, the final step to do is to choose a method of how you are going to withdraw money from Bitcoin.
How to cash out Bitcoin through the regular exchanges
Since there are dozens of cryptocurrency exchanges online, none of them converts Bitcoins to fiat currencies directly. However, the process can be made safely and transparently by sending funds to the bank or PayPal account.
In order to cash out Bitcoin via an online exchange, you first need to have a valid account on a cryptocurrency exchange such as Coinbase, Bitstamp, or Coinspot. This is what you will need to do:
- To open an account on cryptocurrency exchange you just need to sign up, verify your account by submitting the required identification documents and link it to your bank or PayPal account.
- To make a Bitcoin deposit, which at least should be worth $10. Later you could sell your Bitcoins for cash, which then will be sent to your bank account.
- Withdraw funds to the personal bank or PayPal account. To do this, first choose the withdrawal method from the menu on the withdrawal page.
- Enter all of the bank account details.
- Submit the request.
Since most of the cryptocurrency exchanges apply reasonable fees (mainly around 1.5%) for Bitcoin withdrawals, the process of transferring funds to the bank’s SWIFT (USD) or SEPA (EUR) account may last up to 5 business days depending on the country you’re based in.
How much Bitcoins can you cash out via the exchange?
If you are going to cash out large amounts of Bitcoins, it is worth knowing what limits do the online cryptocurrency exchanges apply. Most of them however apply the limits on amounts that may be withdrawn daily.
Depending on the exchange and on the region the user is located, these limits may vary. Coinbase, for example, allows the daily withdrawal limit up to $10.000. Meanwhile, the withdrawal limit on Binance is 2 Bitcoins per day for the unverified users or 100 Bitcoins for verified users.
Usually, online exchanges provide their users with the possibility to increase the withdrawal limits by upgrading the level of the account.
Cashing out through online exchanges is one of the safest ways to withdraw Bitcoins. If the transfer time and withdrawal fees are not right for you, then you should consider another way of Bitcoin withdrawal.
How to cash out Bitcoin through the P2P exchanges
For Bitcoin holders who prefer a higher level of anonymity when converting Bitcoins to cash, the option of using the peer-to-peer (P2P) cryptocurrency exchange is available.
Contrary to their centralized counterparties, the P2P exchanges like LocalBitcoins or Paxful do not hold Bitcoins for their users. Instead, they connect traders and allow them to make deals privately while staying anonymous.
In order to make a transaction on P2P exchange, users have to follow the simple instructions:
- To open an account on P2P exchange and verify their ID by submitting the required documents and linking it to the valid bank or PayPal account.
- To find a reliable buyer. Thus it is important to check up the feedback score and review the comments on another user. Although the decentralized P2P exchanges give more privacy and anonymity, the spot prices of digital assets as well as fees are set by the individual traders. Thus users who want to sell their Bitcoins should evaluate both their possible profits and competitive environment carefully.
- Make a transaction. The important moment here is to use a P2P exchange that includes escrow service. This means that Bitcoins will be currently locked since the seller confirms he received payment.
Since P2P exchanges support various payment methods, users can choose within bank transfer, gift voucher or PayPal, Skrill, Payoneer, Western Union, or Neteller.
Although Bitcoin is rapidly going its path towards the wider adoption, it still may take time to cash out the world’s leading digital currency. And since the only direct option to convert Bitcoins to fiat is by using Bitcoin ATMs, the amount of them is not enough across the globe to meet the needs of remote users or those who are located elsewhere than in the big cities.
However, there still are ways of how to cash out Bitcoins on regular and P2P exchanges. While both types of exchanges have their own advantages and scarcities, it is important to evaluate personal needs first. The factors like transaction fee, time or type of the account to which the funds will be withdrawn, as well as local laws should be kept in mind before cashing out the benchmark digital currency.