You might have unknowingly bought a few Bitcoins a few years back when they didn’t have much value, or you might have taken full advantage of faucets or airdrops. Now, that those few Bitcoins are worth a few thousand dollars, you might be considering cashing it out. So, how do you begin, and what aspects should be kept in mind? This detailed guide will help you navigate through the process of cashing out large amounts of Bitcoin.
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What Is ‘Cash Out’?
In simple words, ‘cash out’ refers to the exchange of your crypto tokens or coins for fiat or traditional ones. If you’re looking to liquidate capital, cashing out crypto, such as Bitcoins is the fastest and simplest way to do so.
The cryptocurrency market is quite volatile, which is another reason people may choose to cash out and cut their losses. If you are unsure whether cashing out is the best option, and want the latest Bitcoin market trends, click here to gain real-time, data-driven insights.
It is important to cash out your coins through the best channels to ensure that you maximize your returns. Listed below are four of the best ways to exchange large amounts of Bitcoin, for traditional currency.
The fastest and most direct way to access your Bitcoins, and use them as fiat currency, is via a cryptocurrency card. It works exactly like your typical debit card, and the only difference is that it is not attached to your bank account.
Instead, it is connected to the digital wallet, where you store your cryptocurrency. The card will directly convert your crypto tokens into your preferred fiat currency, usually dollars or sterling.
You can use it exactly like your traditional cards, for both online and in-store purchases. A cryptocurrency card can also be used to withdraw money from certain designated ATMs. There are several cards available, and often, their limits and transaction fees match that of normal credit or debit cards.
Cryptocurrency Exchange Platforms
These exchange platforms are structured spaces, where both corporations and people can trade cryptocurrencies. Cryptocurrency exchanges facilitate the buying and selling of coins and tokens.
Exchanges are a great option to cash out large amounts of Bitcoin, as they have strict protocols in place for security and identification. It is also mandatory for the platforms to adhere to AML or anti-money laundering regulations, which makes them completely secure and transparent.
Though the whole transaction process is automated, it might take three to five business days for the amount to be reflected in your registered account. Also, most exchanges only allow you to withdraw funds and deposit them in the original account, from which you initially began your transactions.
This is to adhere to the AML regulations. Ensure that you factor in some extra time to complete your account registration and verification. Some exchanges also dictate that a minimum deposit has to be made before you withdraw the cash from selling Bitcoins.
Peer-to-peer exchanges, or P2P exchanges, in short, work quite similarly to cryptocurrency exchanges. The difference is that these exchanges offer you more anonymity, that is, no user identification is required to complete transactions.
While P2P exchanges can be more time-consuming when compared to crypto exchanges, the transaction fees are often lower. Therefore, the price you get for cashing in your bitcoins will also be more.
Since P2P platforms facilitate exchanges between private users, and there is no intermediary, the risk of scams is quite high. To avoid this, you can go through the online rating of any P2P platform that you’re considering.
Based on the user reviews and ratings, you can make an informed decision, and get maximum gains from cashing out your crypto. The security on these exchange platforms is partly managed by holding the funds in an escrow account, till both parties confirm the transaction.
In a Bitcoin ATM, in lieu of withdrawing currency from a bank account like at a conventional ATM, you’ll be doing so from your digital wallet. These ATMs, are abbreviated as BTMs and are faster than exchanges.
In addition to security, BTMs also offer complete anonymity and privacy. If you want to use a BTM, you’ll have to ensure that there is sufficient balance in your assigned BTM digital wallet.
A significant disadvantage of this system is that they’re not always accessible. Unline traditional ATMs which can be found in most remote areas, BTMs are not yet common. Also, when compared to an ATM, the transaction speed is much slower and can take nearly thirty minutes.
A BTM can also run out of paper currency, and you might have to wait a while till it is restocked. Nevertheless, its advantages trump its cons, and BTMs offer the best of crypto exchanges and P2P exchanges.
Tips To Keep In Mind
There are three tips to keep in mind while cashing out your Bitcoin. First, it is important to get verified fast, so keep all the necessary identity documents ready. Next, the best price doesn’t necessarily equate to the best returns.
This means that you should verify the transaction fees before going through with the exchange, for if it is high, you’ll not be getting a good return for your coins. Lastly, cashing out is not an immediate process, especially when you do it through an exchange. So, manage your finances well in advance, and factor in the time required for verification, withdrawing funds, and bank authorization.
There are a number of options to choose from when it comes to exchanging your Bitcoins for traditional money. Taking your time to select the method that works the best for you, goes a long way in ensuring that it is a smooth sailing process.
It might be tedious to cash out your Bitcoins when you compare the process to that of exchanging fiat currency. However, you can achieve maximum returns if you go through the right channels, plan well, and have patience.