New traders of cryptocurrency often feel stuck when it comes to cashing out their assets. The growing numbers in the wallet seem amazing. However, they are worthless if you can’t spend them on buying stuff. Cryptocurrency is money, but it isn’t nearly as much widely accepted as fiat cash. Therefore crypto traders have to cash out bitcoin and other digital assets for taking some tangible advantages.
What is Bitcoin?
Bitcoin is the poster child of cryptocurrency. It was invented in 2008 by the pseudonym of Satoshi Nakamoto. Bitcoin provides a permissionless system for the swift transaction of money. It has no central authority or bank overseeing the work. The system is run by computers across the globe. Anyone can become part of the system by downloading the open-source software.
The people who own bitcoin have different views of this currency. Some consider it a ‘store of value’ just like gold. While others consider it an asset for making money through short term trading.
How to Buy Bitcoin?
There are multiple options available for purchasing bitcoin. You can go to online crypto exchanges to buy bitcoin. It is the safe and widely recommended method. Exchanges like Coinbase allow users to buy bitcoin on the spot with their local currency.
Other methods to buy bitcoin include using bitcoin ATM or peer-to-peer purchase. You can read about the five best places to buy bitcoin on this blog.
Whether you are a long term holder or short term trader. You need to sell bitcoin for cash at some point. Usually, traders opt to cash out once their set sales price is met.
Below we will discuss some of the best practices of selling bitcoin to cash.
How to Cash Out Bitcoin?
Bitcoin is a hot topic in 2021. The bull rally is in full swing. Resultantly, everyone is talking about the currency. Every other day there is news of corporate companies joining the crypto space. Just last month, Tesla announced the news of letting buyers pay in bitcoin. So, bitcoin is no longer an obscure payment system.
With all the popularity, new investors are entering the crypto arena to buy bitcoin. Due to the growing number of interested folks, you can easily sell your bitcoin for cash. Moreover, the prices are high so if you purchased BTC 2-3 years ago then right now is the perfect time to sell it.
People with significant experience in trading crypto know where to find the buyers for their assets. However, if you want to cash out bitcoin for the first time, then here is what you should do.
- Sell Bitcoin On Broker Exchanges
- Sell Bitcoin on Peer-to-Peer Exchanges
A third party broker exchange allows you to deposit bitcoin and request a fair withdrawal. You can receive the cash through a bank or wire transfer. There are numerous broker exchanges supporting cash withdrawal in fiat currencies. Nevertheless, it takes 4-5 working days before the money reaches your account.
You can sell bitcoin to other people like yourself on peer-to-peer exchanges. The buyers and sellers can coordinate with each other and settle for a payment method on P2P exchange. You can ask the buyer to deposit money into your bank account or receive cash by hand before releasing bitcoin to them.
Here are the 4 steps you have to go through for receiving cash against your bitcoin deposit.
Choose the Exchange for Depositing Bitcoin
The first step is picking up a suitable exchange for sending your bitcoin. A good exchange will have following qualities.
- High Trading Volume
- Low Fee
- High Security
The exchange with high trading will have a greater number of buyers. Therefore, it is likely for you to easily receive your selected price. Moreover, there is a greater number of buyers ready to acquire the assets.
All exchanges charge some fee for deposit and withdrawal. Nonetheless, if the fee is too high then your profit percentage diminishes. Henceforth, pick a low-cost exchange to make optimal gains.
Security is paramount when it comes to sending your bitcoin to an exchange platform. Do some background check. See if the previous users of the exchange were able to cash out or not. Moreover, if an exchange is making inconceivable return claims, then run in the other direction.
Deposit Your Bitcoin on the Exchange
Once you have selected an exchange, proceed to deposit funds into the exchange. Transfer of assets should be done with great care. Type the recipient wallet address instead of copy and pasting. There is a very common scam involving copy and paste malware. It changes the address when users try to send digital assets to a specified wallet address.
Also Read: Best Cryptocurrency Exchanges for 2021
Binance offers the QR code scanning feature. Users can scan the code for sending funds to the exchange account.
Sometimes new users face difficulty in depositing funds. In this case, customer care of the exchange can assist you. However, never share your accounts details like your private key with anyone.
Trade Bitcoin For Fiat
By this stage, your bitcoin is in the exchange account. The next step is trading bitcoin for fiat currencies. There is a little complexity here. Crypto exchanges offer to trade among fixed trading pairs. Essentially, this means that you are not free to choose the local currency. You have to pick an existing pair against which you will sell bitcoin.
Binance lets users sell bitcoin for Euros (EUR), Australian dollars (AUD), British pounds (GBP), and some other local currency pairs. You can choose the pair and sell bitcoin at a spot price. However, if you want to sell at a higher price then set the price and wait for market value to rise.
Cash Out Bitcoin
After selling bitcoin, you can withdraw the currency to your local bank account. This stage can take some time depending on the exchange and mode of withdrawal. For example, Coinbase allows withdrawals to the bank through Wire transfer and SEPA. US customers receive funds in 4-6 working days, whereas EU withdrawals take less time.
Crypto exchanges also charge a fee for cashing out. Therefore, calculate your cost before setting the selling price.
It is said that your crypto is safe only in your wallet. However, you need to put your assets in exchange for trading them. Bitcoin can be traded easily because they are popular. You will always find people who are ready to purchase bitcoin. Get a good deal by going to an efficient and cost-effective purchase.
The crypto industry is an attractive place for scammers. There is little understanding of how buying and selling bitcoin works. Scammers take advantage of this. Therefore, you need to do proper research before you decide to cash out bitcoin through a broker or peer-to-peer exchange.