If you have been trading cryptocurrencies and have made a profit you have probably considered selling to secure some cash. After all, the space is extremely volatile so why wouldn’t you want to hedge your risk or buy something nice with your hard-earned money?
But you may be wondering, How exactly do I cash out Bitcoin?
Don’t worry. In this article, I will be covering 5 ways of cashing out Bitcoin. So without further ado, let’s jump right in.
What does cashing out Bitcoin mean?
Simply put, cashing out Bitcoin is the process of selling your cryptocurrency asset for traditional FIAT currencies e.g US dollars.
5 ways to cash out of Bitcoin
Ultimately, the use of centralized exchanges is the most popular way of converting Bitcoin to cash. Industry leaders such as Binance and Coinbase offer quick transfers and withdrawals between bank accounts.
Not to mention, the overall liquidity is second to none. When selling the slippage is minimized. All that is required for trading is for users to specify the selling price and the total amount.
Once the exchange has found you a buyer they execute the trade and you receive cash in return. This can then be withdrawn to a bank account provided you have provided the correct documents.
E.g proof of address, government-issued identification card, etc.
Peer to peer
Generally speaking, peer-to-peer trading is conducted on platforms that match buyers and sellers. Buyers list their desired price, payment method, etc.
Then when a seller wishes to trade they follow the listed requirements. This process is mediated by the platform which holds funds in escrow until the trade is settled to ensure the security of the transaction.
Overall, several platforms facilitate peer-to-peer cash conversions. From hodlhold.com to localcrypto.com there is an option for everyone.
Face to face trading
The main benefit of this option is that you bypass any intermediaries. As a result, no middleman is taking a cut and therefore there is no commission charged. That being said, the total pool of buyers is lower.
When compared to other mediums of exchange the asking price is usually higher. That being said, it is important to stay vigilant.
After all, if you are meeting a strange off the internet then there is always the possibility of physical harm or theft. Not to mention, you need to have an understanding of how to use crypto wallets and blockchain technology.
But if you do find someone you can trust and you have the technical knowledge then it can be a fantastic way to trade due to the low fees.
Over the past decade ATMs that support Bitcoin transfers have increased considerably. In the United States alone there are over 34,000 Bitcoin ATMs.
The benefit of this method of conversion is that it is mostly anonymous. It does not require users to apply with various identifications or proof of address.
That being said, it is worth noting that there can be significant fees and price spreads when using Bitcoin ATMs. Oftentimes, they can charge upwards of 5% so bear this in mind when considering this option.
To find a Bitcoin ATM nearby, you can use websites such as coinatmradar.com or bitcoin.com. Simply type in your location at it will show the distance, daily withdrawal limit, and the associated fee.
Lastly, OTC is mainly reserved for high-net-worth individuals or institutions. This method of cash conversion allows users to trade cryptocurrencies directly with a broker or administrator.
Essentially, two parties trade in a closed market. This form of trading minimizes price slippage for large trades due to the large amount of liquidity that is involved.
Ultimately, the trade is executed at the agreed price without any variation. Moreover, as there are just two parties involved there is a greater degree of confidentiality when compared to exchange trading.
If you want to view this article in a more visual format then please check out my video below:
Overall, there are several different options to cash out of Bitcoin. From the use of exchanges to ATMs there is an option for everyone. So with these methods in my mind hopefully you can secure your funds and feel rest assured that your profits are secured.
I hope you found this article useful and thanks for reading it.
Curious about what is backing Bitcoin? Click here to find out more.