Do you want to know how to transfer Bitcoin to your local currency directly into your bank? This is arguably the only guide you need to read to start cashing out or spending your cryptocurrencies like fiat starting today.
In this guide, we will be looking at seven (7) ways to cash out bitcoins and other cryptocurrencies you might have accumulated:
- One-on-One Transactions
- Cryptocurrency Exchanges
- Peer-to-Peer (P2P) Exchanges
- Crypto Loaded Prepaid Cards
- Crypto-Backed Loans on DeFi Platforms
- Your Local Private Bank
- Over the Counter (OTC) Markets
These are practically the safest, fastest, and least expensive ways of converting your Bitcoin and other cryptocurrencies to fiat.
Fiat refers to your government-issued physical currency.
How to Cash Out Bitcoin – Factors to Consider:
Your choice of which method to use in cashing out your cryptocurrencies may be influenced by:
- The ease and cost of cashing out your crypto.
- How you want the money – physical cash, bank deposit, or other forms of electronic money like PayPal.
- How soon or urgent do you need the cash?
- The local currency and your government’s regulations regarding Bitcoin transactions.
- The amount of bitcoin you want to cash out.
So, without much ado, let’s examine how to cash out your Bitcoin and other cryptocurrencies to cash directly into your bank account.
1. How to Cash Out Bitcoin in One-on-One Transactions
This is probably the fastest and least expensive way to cash out your cryptocurrency – cash out your bitcoin by selling it directly to another individual looking to buy the coins and get them to pay you in your local currency, either by physical cash or bank deposit.
What do you need for successful one-on-one Bitcoin cash-out transactions?
- Someone else who wants to buy Bitcoin and is willing to deal directly with you.
- Your ability to transfer Bitcoin from your wallet to their wallet.
- The person’s ability to pay you the physical cash equivalent of your bitcoin.
This transaction can happen face-to-face in your living room, at a bar or restaurant in your neighborhood; it can also be executed via text, chat, mail, or other means of communication if the other person is not in the exact location.
However, you can’t do a long-distance transaction with a stranger –will you? NO. So this method is only workable when dealing with someone you know so well, like your parents, siblings, spouse, colleague, and other close acquaintances.
2. How to Cash Out Bitcoin through Cryptocurrency Exchanges
Several major cryptocurrency exchanges, such as Binance, Kraken, Bitstamp, and Coinbase, have integrated fiat gateways, making it possible for their customers to transact between fiat and cryptocurrencies.
Binance, for example, has partnered with Advcash (Advanced Cash LTD) to make deposits and withdrawals of fiat currencies such as EUR, RUB, UAH, and KZT possible on their platform.
Coinbase –also one of the most regulated and trusted cryptocurrency exchanges in the world offers a safe and convenient way to cash out your Bitcoin to fiat on their platform, but first, you have to link your bank account or Credit and Debit Cards to the exchange and complete the compulsory KYC verification process –this is standard practice and requirement among all cryptocurrency exchanges that deal with fiat.
More so, in compliance with KYC and international Anti-Money Laundering (AML) regulations, most cryptocurrency exchanges will require you to verify your bank account by making a small “test deposit” before you can cash out bitcoin through their services and you may only withdraw to the same account that you deposited with.
It’s something you should take note of when trying to initiate crypto cash-out transactions.
How long does it take to get my money from Exchanges?
Let’s take Coinbase as an example.
- For US customers on Coinbase, withdrawals to the bank take between 1-5 business days (depending on the method used)
- For European customers, withdrawals to your bank account via SEPA transfer generally take 1-2 business days and one business day for withdrawals via wire transfer.
- UK customers can expect to get the money into their bank account within one business day.
- PayPal withdrawals are instant for US, Europe, UK, and CA customers –check the CoinBase FAQ for daily payout limits.
Please note that there are usually transfer fees and other charges you might incur for the withdrawals.
Check with the respective exchanges you use for the latest information on applicable charges and withdrawal policies.
One of the significant advantages of using this method is that you can withdraw a reasonable amount of money based on the level of your KYC you have completed without much stress, and they’re relatively safer.
More so, you can cash out several other supported cryptocurrencies on the exchanges along with Bitcoin.
However, if you prefer a more anonymous and faster method of cashing out your crypto, you may consider using peer-to-peer exchanges like Paxful and LocalBitcoins.
3. How to Cash Out Bitcoin Using Peer-to-Peer Exchanges
The most popular peer-to-peer exchanges you can use to convert your Bitcoin to fiat are LocalBitcoins and Paxful.
These two popular Bitcoin marketplaces operate in almost all countries, so anyone reading this guide can access them and use their platform to cash out Bitcoin to fiat and directly to their bank.
As the name suggests, Peer-to-peer exchanges provide a platform for individuals to trade Bitcoin without involving a third party.
Peer-to-peer exchanges are mostly escrow-based with a transparent and straightforward fee structure.
These exchanges offer certain advantages that make them appealing to many cryptocurrency enthusiasts looking to cash out of Bitcoin:
- Peer-to-peer exchanges offer greater anonymity.
- Peer-to-peer exchanges offer users the ability to negotiate exchange rates.
- Peer-to-peer exchanges offer more incredible speed.
However, there’s a high possibility of getting scammed if you’re not vigilant –that’s just the basic draw-down of this option to cash out Bitcoin -security is not top-notch like the regular cryptocurrency exchanges.
How Does Peer-to-Peer Exchanges Operate?
First, you need to open an account on any of the exchanges –for example, LocalBitcoins; then complete your profile setup and place a trade request to sell bitcoin.
You can specify your preferred payment method. Some of the payment options include:
- Bank transfers
- Cash deposits
- Gift vouchers
- Skrill, Payoneer
- Western Union
- Neteller
- PayPal
- Mobile money
- Meet in person in your neighborhood and trade for cash settlement
Once you get a buyer, you can negotiate rates and initiate the transaction. Your coins are locked in the escrow wallet until you confirm the cash receipt.
Neither you nor the buyer can access a coin held up in escrow during a trade until the deal is successfully closed. If any problem arises along the line, the admins will step in to verify your claims and settle the dispute accordingly, based on evidence.
Make sure you’re trading on reputable peer-to-peer exchanges to avoid scams. The platform itself can scam users, so be vigilant and read exchange reviews before you move your funds there.
4. How to Cash Out Bitcoin Using Crypto-Loaded Prepaid Cards
The drive for crypto mass adoption has led to many projects introducing innovative products to bridge the gap between crypto and fiat, thus making it super easy for ordinary people to buy and sell cryptocurrencies quickly.
One such effort to make the crypto-to-fiat conversion smooth and convenient for most users is Crypto Debit Cards.
The cards are preloaded with bitcoin and any other supported cryptocurrencies the issuing Company supports and can be used to withdraw your funds across millions of ATMs around the world or used for shopping on thousands of online merchant stores and in-store POS terminals that accept Visa or MasterCard worldwide.
Does this sound like a way to go in your search to cash out Bitcoin to fiat?
Let’s examine the various Crypto Debit Card providers in the market; then, you can decide which of them you will apply to get their Card and start spending your crypto wealth easily.
Best Crypto Debit Cards:
Some of the best cryptocurrency debit cards you can consider applying for include:
- Nexo Mastercard –Access your money worldwide with zero foreign exchange fees. Monitor your transactions on the Nexo Mobil App and enjoy 5% cash-back on all your purchases with the Nexo Mastercard.
- Coinbase Card –allows you to spend the funds in your Coinbase account instantly. Available to Coinbase customers in the UK, Spain, Germany, France, Italy, Ireland, and The Netherlands. The Card is useable anywhere that Visa payments are accepted.
- Wirex –One of the most established companies in the space with over 2 million customers and a transaction volume of $2 billion.
- Revolut –Spend abroad with no fees.
- BitPay Visa Card – The BitPay prepaid Visa card is only available to US citizens and is globally useable everywhere Visa cards are accepted.
- MCO Visa –available in Singapore and over 30 US states and counting
- Cryptopay Card
- SpectroCoin Prepaid Card
- Bitwala –a secure card designed for global spending
This list is not exhaustive, but they’re the top existing products in the market for you to choose from.
So, what factors should guide your choice of a card?
- Is the Card supported in your region?
- Is it user-friendly or full of complicated processes?
- How secure are the Card and the issuing platform?
- Is the Card reliable? Visa and MasterCard linked cards are more reliable.
- What is the fee structure, and is this transparent? You wouldn’t want to SHARE your money with some crypto card Companies in the name of transaction fees.
- Does the Card support multiple cryptocurrencies and fiat? How many fiat currencies does it support? Is it globally usable?
You will need to take your time and evaluate the various options and choose cards that provide the most essential features.
Now, you can carry your crypto everywhere with an intelligent crypto card.
5. How to Cash Out Bitcoin Using Crypto-Backed Loans on DeFi Platforms
What if you never really need to cash out Bitcoin?
What if you can spend all the cash your Bitcoin is worth without selling your Bitcoin?
What if you go on this spending spree and still enjoy any future price appreciation of the same bitcoin?
All these are made possible by Crypto-Backed Loans on DeFi platforms.
We can call them “crypto banks” or “blockchain banks” providing financial services on the blockchain.
How does it Work?
- You deposit your crypto into the platform.
- You request a cash advance, and the Company transfers the fiat into your bank account.
- Your deposited crypto is held as collateral for the cash advance.
- You get your coins back once you pay back the money you collected.
That’s just how simple it can get.
So, what are the benefits of using this method?
- It’s a legit way of avoiding being taxed, as you are not selling your Bitcoin. You’re simply taking loans, and loans are not taxable.
- You still enjoy any future appreciation in the Bitcoin price or whatever cryptocurrency you have deposited. If bitcoin was $ 10,000 when you took the loan, and when you came to pay it back, the price had risen to $20, 000 your wealth just doubled even while you’re spending it –amazing.
Several companies provide this service, including MakerDAO, Nexo, EthLend, and Salt.
As is always the case, review the platforms carefully before depositing your Bitcoin.
6. How to Cash Out Bitcoin Using Your Local Private Bank
If you are trying to cash out Bitcoin worth millions of dollars, you will find that going through a private bank may be your best choice.
The bank can help you facilitate both the sale and the movement of the fiat equivalent to your desired destinations.
More importantly, you may want to consider using a private bank because you will get more professional help with receiving your funds without getting your account frozen due to heavy and sudden cash flow.
7. How to Cash Out Bitcoin Using Over-the-Counter (OTC) Markets
A specific volume of crypto transactions is impossible with any of the options above. That brings us to the last item on the list of ways to cash out Bitcoin –Over the Counter (OTC) Markets.
What are OTC Markets?
Over-the-counter markets are avenues for participants to trade directly with each other without the use of a central exchange or other third parties.
In practice, traders in an OTC market don’t trade directly with each other but go through what we call OTC desks or exchanges.
OTC desks are maintained by major exchanges such as Binance, Coinbase, and Circle to accommodate traders willing to sell large amounts of coins, like miners or early crypto investors who have accumulated millions and even billions of dollars worth of coins.
Crypto millionaires and billionaires are looking to buy crypto without using public exchanges.
You can cash out bitcoin worth millions of dollars by approaching popular OTC market providers and negotiating rates.
They have been known to facilitate a large volume of crypto transactions this past few years and remain the top place to cash out a large amount of coins anonymously and securely.
You’re mistaken if you think the OTC market is free of scammers. The big scammers – as hackers operate here, and the same caveat “beware of scammers” applies in this market, too, if you don’t want to lose hugely.
On a Final Note
There we have it –seven (7) ways to cash out Bitcoin. As the cryptocurrency industry matures, better and more advanced means of converting your crypto wealth to cash are being developed and released into the market.
Spending your cryptocurrency shouldn’t be a complicated process, and we hope that with this guide, you find at least one method that works just fine for you –balancing anonymity with security and speed.
Always speak with your lawyer, banker, and other relevant experts when large amounts are involved so you don’t fall on the wrong side of the law or get scammed of your crypto money.
What other ways do you cash out Bitcoin to fiat and bank? Please share with us in the comments section below.