Acquiring assets in the form of cryptocurrency has become more common than ever. In recent years, global market capitalization of the industry has reached nearly a trillion dollars, and is expected to only increase with time.
This crypto boom has resulted in many people sitting on large amounts of hard-earned money in the form of cryptocurrency. If you’re looking to convert your funds in the most secure manner possible, you can stand to look at this list we’ve compiled below outlining how to cash out cryptocurrency safely and efficiently.
1. Centralized cryptocurrency exchange
Cryptocurrency exchanges are among the most commonly used methods for converting cryptocurrency in cash. These are typically centralized platforms which act as intermediaries between users and banks.
The most popular cryptocurrency exchanges like Coinbase, Binance, and Kraken support trading between hundreds of coins and fiat currencies in exchange for a nominal trading fee. The result is a one-stop solution for cashing out funds.
The process of using a cryptocurrency exchange is quite simple, working similarly to currency exchanges found in airports and other places frequented by travelers. The general method of using an exchange to cash out funds is as follows:
- Create an account with the platform of your choice.
- Provide details for identity verification such as name, dob, and copies of your national ID card.
- Connect your bank account to the platform for cash withdrawal.
- Deposit the cryptocurrency you wish to cash out into the platform.
- Sell your crypto for an amount in fiat currency, paying an extra amount as a selling fee.
- Transfer funds to your bank account for easy withdrawal.
2. OTC brokerage services
Nowadays many people are able to earn their cryptocurrency through over the counter brokerage services. These are online platforms which guide users on the best places to buy and sell their crypto for maximum yield, churning out regular deals with liquidity providers to execute transactions.
If you’ve earned your funds with the help of such a platform, an easy way to cash out your crypto would be through the brokerage itself. Keep in mind that unlike a cryptocurrency exchange, you cannot transfer your funds to the brokerage before selling them off. They must have been acquired with the help of the broker and therefore already existing in your account to allow cashing out. Brokerage services typically offer fairly low fees which is an added advantage.
3. Peer-to-peer online trading
Another popular way to sell crypto in exchange for cash is through peer-to-peer trading. This is facilitated by online platforms like LocalBitcoins which host both buyers and sellers from different parts of the world looking to trade their funds. All these P2P platforms do is facilitate the exchange, making it easier for the two parties to find one another.
- Sign up to your desired peer-to-peer trading platform.
- Choose the location where you prefer your buyer to be from.
- Scour through the list of potential buyers, assessing their price, mode of payment, etc.
- Finalize a buyer and send a trade request.
- If accepted, transfer your cryptocurrency to the specified wallet.
- Once you have received your cash, the crypto will be released to the buyer for the trade to be deemed complete.
4. Bitcoin ATM
This method for cashing out cryptocurrency is specific to Bitcoin, in the same way different banks establish their own individual ATMs to provide service to their customers. These physical kiosks are located all over the world in easy to access areas like grocery stores and gas stations.
Although almost all Bitcoin ATMs allow users to buy crypto, some do not support the feature of selling. Tools like Coin ATM Radar can help you look for ATMs that allow selling, finding the exact location of those near you to avoid any hassle.
Once you’ve found one, you can follow the steps below to cash out your crypto.
- Selecting whether you wish to buy or sell your crypto.
- Submit government-issues proof of identification.
- Open the digital wallet in which you have stored the Bitcoin you want to sell.
- The Bitcoin ATM will generate a QR code on the screen to facilitate transfer of funds.
- Scan the generated QR code.
- Once the transaction is approved, the ATM will dispense cash for you to collect.
5. In person transactions
An in-person transaction is the most anonymous way to sell your funds, though it can also be the most inconvenient. If you want to sell your Bitcoin without the involvement of a third-party, you can sell them to an interested person via a face-to-face transaction. Simply transfer the crypto to his digital wallet and receive the amount finalized in the form of cash.
6. Cryptocurrency wallet
The main function of a cryptocurrency wallet is to store your crypto, though many offer built-in services as well making it even easier for you to cash out your funds. Most wallets also partner with third-party exchanges to provide their customers with a way to make trades more efficiently.
An example of a crypto wallet with its own built-in service is Ledger, allowing you to sell your Bitcoin for cash with their product Ledger Live. Ledger also partners with Coinify to allow you to sell other cryptocurrency for cash.
7. Prepaid cryptocurrency debit card
If you want to cash out your crypto with the intent of buying something, a crypto debit card can simplify the process. Operating in the same way as traditional debit cards offered by banks, a crypto debit card is connected to a centralized exchange account which automatically converts your crypto to cash before approving a purchase.
Some exchanges like Coinbase even allow you to use your debit card at an ATM to withdraw cash from your account, though these services are typically quite pricey with high fees being charged on every purchase.
8. Money transfer apps
The biggest money transfer apps like Paypal and Cash App have started introducing crypto buying and selling services within their applications. You can use the app to buy or sell your crypto holdings through their built-in exchanges. A nominal fee is charged for the transfer though it is still pretty affordable.
However, in order to avail this service, you must hold your crypto within the money transfer app. Transferring cryptocurrency into your account from somewhere else is not allowed.
9. Spend your crypto at a crypto-friendly business
Although this method does not result in you acquiring physical cash from your crypto holdings, it does allow you to spend your crypto to make purchases which would otherwise be done using fiat money. You can follow the steps below to use your crypto to make purchases directly.
- Look for some crypto-related symbol at the checkout area of the business you are visiting. If you see a display stating “Bitcoin accepted here”, or the symbol of a particular coin, you are at a crypto-friendly business.
- Find out the retailer’s digital wallet address or QR code you can scan.
- Send the requested amount of crypto to that address.
- Once the transaction is complete, you can leave with your purchased items.
Despite the strides being made in the cryptocurrency space in the last few years, we are still miles away from adopting it as a norm in our society. This makes converting cryptocurrency into cash a necessary transaction, albeit one that is not as straightforward as it should be. As the need for cashing out solutions multiplies in the future, however, we can hope for an improvement in the space, with more innovative ideas on bridging the gap between crypto and cash expected soon.