There are at least five ways to exchange bitcoins for traditional money. You can do it with online exchange services, directly from exchanges, Peer-to-peer services, and other forms. Each of these methods has its pros and cons, as well as peculiarities that are worth learning.
Our cryptocurrency reviewer and blockchain expert Alex looked at all the ways to cash out bitcoin. This article will help readers understand all the variations and elaborate on the fees charged and the safety of this or that method. Well, let’s get started!
How to Turn Bitcoin Into Cash via Exchanges
Many exchanges now can withdraw funds to a bank card. On the one hand, it is more convenient and safer because the risk of the unscrupulous counterparty is reduced.
On the other hand, commissions for withdrawal of cryptocurrency directly from the exchange can be significantly higher than those set by exchangers. The reason: exchanges rarely work with fiat currencies on their own. Instead, they enter into partnerships with other services.
In other words, when cashing out cryptocurrencies, the trading floor transfers funds to a third-party service, and the latter already transfers the money to the user. In this case, he pays a double commission at once, the total value of which can reach 4-5%. Always check the withdrawal conditions!
Convert Bitcoin via Online Exchange Services
This type of crypto exchange has been gaining popularity by leaps and bounds lately. Both offers in the market for this type of service and its ease play a massive role. The principle of exchanging cryptocoins through an online exchanger is as follows:
- Use an aggregator of exchangers. Such a resource gathers up-to-date information on online exchangers: it includes exchange rates, possible destinations, the reserve of funds in this direction, reviews of the service’s clients.
- After choosing a cryptocurrency exchanger, you get to its website, where you should carefully read the rules of the service.
- Proceed to the procedure of exchanging your coins for currencies from the list of available currencies.
- Most often, you will need to fill in a simple form, in which you will need to specify the number of coins to withdraw, e-mail address, sometimes the first name, last name, and cell phone number.
- After filling this information, you will have to transfer your bitcoins to the specified wallet number and wait for the funds to be credited. Because some exchangers can make payments after 5-10 confirmations of the transaction by the network, the payment may take a couple of hours.
To summarize the above, we can highlight the following disadvantages of online exchangers:
- Not the most favorable exchange rate. This is because the rate is not continuously updated but periodically.
- The risk of falling for an unscrupulous resource is not high, but the probability of fraud is higher than when withdrawing with the help of a cryptocurrency.
- It is not always possible to withdraw the desired amount, as its size depends on the availability of currency reserves and the terms of the exchanger.
- Often services with reasonable exchange rates are not available around the clock because cryptocoins withdrawal procedure will be done manually or semi-automatically.
Despite this, the number of users of this particular bitcoin transfer procedure increases every year because of its.
Cash Out With a Bitcoin ATM
Outwardly, Bitcoin ATM (cryptomats) resemble terminals or ATMs. Accordingly, they operate according to a similar principle. Bitcoin ATM allows a person to purchase cryptocurrency using cash and make a reverse transaction.
ATMs are conventionally divided into 1-way, 2-way, and universal installations. The first allows only to buy a cryptocurrency for cash. The second category is the purchase and sale of cryptocurrency. Universal ATMs are for buying and selling bitcoin and other coins and support payments in BTC and other crypto services or goods.
The user can transfer funds to it and thus cash out bitcoin and some other popular coins. Cryptomats have several disadvantages:
- Large commissions, often higher than 5%.
- Difficult to find: at the very beginning of 2020, it was reported that the total number of Bitcoin ATMs in the world exceeded 1,300, according to the Coin ATM Radar service.
- Counterparty risk: it is possible to use a device installed by fraudsters.
Sell Bitcoin Using Peer-to-Peer Exchange
Peer-to-peer platform is one of the oldest forms of cryptocurrency exchange on known exchanges. A buyer and a seller in a P2P network publish a trade announcement to execute a transaction in a specific price range to a particular location. There is a direct interaction between buyer and seller.
Thus, if a seller wants to buy a bitcoin at a specified location, then locally, the P2P exchange will connect with the person who wants to sell the bitcoin. This method allows both parties to execute the transaction at the right time and place it at an agreed-upon price with a payment mode that is easy for both parties.
Such transactions should only be made with people you trust because there are many ways to cheat. A partner can pay at the wrong rate, disappear when receiving the cryptocurrency, claiming a technical error, or rob him or her. However, it is possible to safely make a deal with another person and exchange cryptocurrency without intermediaries. P2P platforms can help with this.
Turn Bitcoin into Cash Using LocalBitcoins
The most popular P2P platform is LocalBitcoins. This is a cryptocurrency exchange where you can sell and buy Bitcoins directly from other users, without intermediaries. The platform only controls the honesty of the transaction. The commission is 1% of the transaction volume and is charged to the person who created the ad. There are four levels of account verification.
On LocalBitcoins, a user conducts a transaction with another user, and the service acts as a guarantor that one will not cheat the other. At the moment, it is more profitable to withdraw bitcoin through LocalBitcoins than through exchangers. However, there are several disadvantages:
- The price is quoted without the bank or system’s fee for the transfer.
- P2P services are less popular than exchanges and exchanges. Thus, there are few offers to buy and sell cryptocurrencies, and if they exist, they are often for small amounts.
Use a Bitcoin Debit Card
The Bitcoin debit card will not turn your bitcoins into hard cash. This card allows you to use your bitcoins just like any regular debit card. You can load your bitcoin onto these cards, and they will automatically convert your bitcoin into fiat currency such as USD, EUR, GBP, AUD, etc. Some popular Bitcoin debit cards are Crypto.com, Wirex, and Cryptopay.
Holding a Bitcoin debit card allows you to spend, buy and pay for anything or even withdraw cash from ATMs anywhere in the world, as long as Visa/Master cards are accepted. Access to these limitless Bitcoin-funded debit cards is crucial for anyone, allowing you to make purchases online and offline, anywhere in the world, without the hassle of paying expensive fees.
What Next
There is no universal way to convert bitcoin to cash because each has its characteristics, which can be perceived as both disadvantages and advantages. Everyone decides for himself which option is the most suitable for him.
If you are interested in cryptocurrencies you want to plunge into this exciting and fast-changing world, then our site, together with our primary reviewer Alex, will help you to do it. We have a lot of material and articles on topics related to blockchain, for example, about HitBTC cryptocurrency exchange or Coinexchange cryptocurrency exchange. We very much hope to be beneficial to enthusiasts.
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