Over 10 years after its creation, Bitcoin is still the most popular cryptocurrency. Two massive rallies that took place in 2017 and 2021 contributed to its greater integration into the lives of many people. In 2021, Bitcoin even became a legal tender in El Salvador. Most cryptocurrency products support Bitcoin. It makes cashing out Bitcoin pretty easy. You not only can do this but you can choose the most comfortable way to do this out of many.
This article provides a full guide on cashing out BTC and includes several methods that can be more or less preferable depending on the location you are in and other factors.
Cashing Out Through a Crypto Exchange
Some crypto exchanges support fiat-crypto trading pairs while others provide users with a straightforward “Sell Crypto” feature. The latter is usually associated with higher fees though.
So if you don’t find it demanding, you can trade crypto for fiat money. If you don’t have time for trading or understanding the trading process but don’t mind spending more on fees, you may opt for Sell Crypto.
Check which exchanges are available in your location. It’s safer to lean to reputable exchanges that work without limitations in your jurisdiction. Learning if the exchange is trustworthy can seem a hard task. However, usually, finding unbiased feedback is not that hard. If you see that the exchange cares about its clients and helps if they stumble upon some issues, you can use this exchange. Read the reviews too.
Image source: Kraken
Such huge and reputable exchanges as Coinbase, Gemini, eToro, Bitstamp, and Kraken are available in many countries. Binance is the exchange with the highest liquidity but it’s not available in the US and several other countries. All of these exchanges provide off-ramps.
Cashing Out Through a P2P Trading Platform
Bitcoin itself is a peer-to-peer payment protocol. However, as the crypto industry was progressing, the ideals of the cryptocurrency pioneers were more or less left behind. Nevertheless, the P2P platforms still exist today. Most of them are integral to huge centralized crypto exchanges. These platforms allow exchanging money with other people directly while an exchange platform serves as an escrow.
This method usually offers a rich set of accepted payment methods, competitive fees, and strong security. Popular P2P exchanges are LocalBitcoins, LocalCoinSwap, and Bisq. However, almost on any huge crypto exchange you will find a P2P board. Follow the platform’s guide not to lose your money to scammers.
Cashing Out Through an Online Broker
As crypto Online brokers continue to embrace cryptocurrencies, you may find a broker platform that allows you to cash out your Bitcoin. You won’t be able to transfer crypto to some of the broker apps as they don’t allow it. Check if you can do it before you choose the app. Probably one of the best-known broker apps supporting crypto on- and off-ramps is Robinhood. Other options include the following:
Webull. The Robinhood-like app provides an off-ramp. Although the app is fee-free, spreads will cost you around 1% per trade. The app supports several cryptocurrencies, including BTC, ETH, and DOGE.
Interactive Brokers. They work through Paxos Trust Company and Zero Hash. Interactive Brokers support BTC, ETH, and few other cryptos. The platform charges arguably the lowest fees for cashing out.
Tastytrade. It is another broker app partnering with Zero Hash. It charges 1% commission per trade but the maximum fee is $10. The app supports only a few cryptocurrencies, including Bitcoin.
Cashing Out Through a Bitcoin ATM
Although the number of Bitcoin ATMs is fluctuating and we can’t state it’s constantly growing, by the beginning of 2024, there were over 34 thousands of Bitcoin kiosks around the world with around 83% of them in North America.
Image source: CoinFlip YouTube channel
Most Bitcoin ATMs allow you to buy BTC for fiat money but only a few of them have a cashing out option. If you don’t know where to find a nearby Bitcoin ATM, use special websites (i.e., Coin ATM Radar). Don’t forget to check that you need exactly an ATM supporting the “Sell Crypto” feature.
For cashing out through a Bitcoin ATM you will have to provide an ID or similar document. You will need to scan the QR code of the ATM BTC address and send your coins there. When coins hit the address, the kiosk will release cash.
The main disadvantage of ATMs are their high fees. Normally, the cashing out through an ATM will cost you around 15% in commissions.
Cashing Out Through a Prepaid Debit Card
Prepaid physical and virtual crypto debit cards are released by various companies. Some in partnership with giants like Mastercard and Visa. You can pay with such cards anywhere the cards are normally accepted. The card is connected to a crypto exchange. The crypto you hold on the card is instantly exchanged for fiat currency and the purchase takes place.
The fees may vary depending on the company providing a card. Most of the cards are released by crypto exchanges. Among the most popular brands releasing crypto cards are Nexo, Cex.io, Coinbase, Wirex, Crypto.com, KuCoin, and Bybit.
Cashing Out Through a Crypto Wallet
Modern cryptocurrency wallets are packed with features. On-ramps are the normal thing. As many wallets partner with exchanges, some of them provide users with crypto off-ramps. Cashing out your BTC through a wallet is as convenient as it is expensive. Be prepared to face 3 to 5 percent fees.
Cashing Out Through a Money Transfer App
As the traditional financial market keeps on incorporating crypto, some money transfer apps have naturally embraced crypto. PayPal and Cash App can already boast in-built crypto exchanges with a cashing out option on top of others. Check if any of reputable money transfer apps are working in your location and choose the one with the best conditions. Note that some of these apps don’t allow users to transfer crypto on the app’s balance, meaning that the only crypto you can cash out through these apps is the crypto you bought within these apps.
Spend BTC
If you need fiat money to buy something, check if you can actually buy it with crypto. Probably you’ll be surprised to find that many merchants accept payments in crypto. Some brick-and-mortar shops have “We accept Bitcoin” signs on their doors or near the checkout area. Online shops can accept crypto too.
Image source: The European Business Review
Some huge brands accepting Bitcoin are Microsoft, KFC, Pizza Hut, Subway, Burger King, Wikipedia, Norwegian Air, ExpressVPN, AT&T, and many others. If you didn’t decide what or when to buy something, you can buy a gift card of one of hundreds of global brands on Freewallet or top up your phone with crypto.
Taxes
Please note that in many countries operations with crypto are subjected to taxation implications. If you sell BTC at a higher price than you bought it, you will have to pay taxes for the profits you have made this way. Whenever the method of cashing out crypto you choose, visit a FAQs section to look if the platform provides documentation needed for taxes or contact the platform’s support team or taxes expert for advice.
Conclusion
As you can see, there are many different ways to turn your crypto funds into fiat money or even goods. If you already hold your crypto in the wallet or on the balance of the exchange, it is possible that the wallet or the exchange themselves support cashing out (although it doesn’t necessarily mean, their conditions are the best for you).
Some are after swiftness and convenience, others prefer low fees and best rates. You can choose the best option depending on your personal priorities. Note that options like money transfer apps and online brokers often don’t allow transferring crypto funds from external wallets. Such an option as a prepaid physical crypto card may seem extremely handy, however, it will take time to get it and it can be unavailable in the location you are in. So do your research and choose what’s best for you.