As a digital currency, Bitcoin is still a long way from being used as payment for day-to-day necessities. Whether or not you have a large Bitcoin portfolio does not change the fact that you need cash on hand or at least in your bank accounts to purchase items.
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What does it mean to Cash-Out?
To cash out your bitcoin holdings means to sell the digital asset in exchange for traditional (Fiat) currency or other preferable cryptocurrencies. And if you want to earn bitcoin please check the impressive details it has.
It’s not a bad thing to hold your digital assets, but at a point, you have to cash out! It doesn’t necessarily mean you have to convert the entire wallet to fiat, just a percentage. It is always advisable to cash out your profit when the value of your Bitcoin investment is way higher than the amount you bought it for.
Some of the reasons why people convert their bitcoins include:
- To settle debts
- For emergency purchases
- For profit (buy low, sell high)
- For travel expenses
Please permit me to walk you through the various methods you can exchange your bitcoins for cash.
How to Convert Bitcoin to Fiat Currency
Fiat currencies are centralized financial systems legally issued and controlled by the government.
Here are four secure methods of exchanging Bitcoin for traditional currencies. The convenience of each method depends on your needs. Some methods could help you save on taxes and other required fees, while others may not.
Cryptocurrency Exchange Platforms
These platforms are secure third-party agencies specializing in providing fiat in exchange for bitcoins. Some of these exchanges include Coinbase and Robinhood. Both are equipped to sell and cash out not only bitcoins but other crypto-currencies as well, for fiat currencies like Euros, Yen, Pound Sterling, USD, Canadian Dollars, etc.
To operate these mobile-friendly online exchanges, you have to create an account that you’ll use to trade and convert your bitcoins. Most exchanges verify their users before any transaction can be made.
Bitcoin ATMs
Not everyone prefers to go through the stress of setting up online crypto exchange accounts. Many say that signing up, verification, and withdrawal can take a while and is not convenient for urgent situations. In such situations, you might have to find a bitcoin ATM near you.
The downside to this medium is that bitcoin ATMs are limited in number. Currently, there are less than 20,000 bitcoin ATMs globally, with the United States having at least 70% of the total numbers. With a bitcoin ATM, you can take out a small amount of your bitcoin that would satisfy your immediate needs. Each machine has a transaction limit of 10,000 dollars worth of BTC for each user, so it is impossible to cash out every bitcoin you own with an ATM.
Consult an online map to locate the nearest bitcoin ATM admission stand. This method comes with a fee, which is determined by the total amount withdrawn.
Peer-to-Peer (P2P) Bitcoin Exchange
You are in direct contact with traders who are willing to buy your bitcoin. Often, there is no third-party involvement in this method. However, recently, crypto exchanges have had to act as escrow services due to the high frequency of fraudulent sales between P2P traders and sellers.
You might want to set up a crypto P2P exchange account for this. Once your verification is confirmed, you’ll be granted access to the exchange marketplace, where you’ll find a list of potential buyers for your Bitcoin.
Bitcoin Debit Cards
This is the most efficient method for frequent travelers. With a bitcoin debit card, you can spend your cryptocurrency without converting it into cash. There are no conversion fees either.
Bitcoin debit cards can be likened to prepaid cards loaded with bitcoins. You use these cards the same way you use a debit card linked to your regular checking account. The card automatically converts bitcoins into local currency, and it can be used in any reputable establishment that accepts Visa or MasterCard.
Bottom Line
Liquidation of Bitcoin holdings might seem complex for a beginner, but with time, it becomes just another regular activity.
Having a go-to method for cashing out your Bitcoin holdings helps you save time and fees. You have to do more research and comparisons to determine which method is best for you.
