Cashing Out Your Bitcoin: Strategies For Profitable Withdrawals

There are several ways to cash out your Bitcoin investment. You can use a crypto exchange, such as Coinbase, Binance, or Kraken, and sell your Bitcoin for fiat currency, which you can then withdraw to your bank account. Alternatively, you can use a peer-to-peer (P2P) crypto exchange to sell your Bitcoin directly to another individual in exchange for cash. Another option is to use a Bitcoin ATM, which allows you to sell your Bitcoin for cash, but often comes with high fees. You can also consider getting a crypto debit card, which is connected to your crypto exchange account and allows you to make purchases or withdraw cash from ATMs. Finally, you can spend your Bitcoin directly at crypto-friendly businesses or use it to purchase gift cards.

Centralised crypto exchanges

To cash out Bitcoin using a CEX, you will first need to sign up and verify your identity. After depositing Bitcoin into your exchange wallet, you can select the fiat currency and amount, and sell your Bitcoin. You can then withdraw the cash into your bank account.

Using a CEX to convert Bitcoin to cash usually takes a few days. The fees for doing so depend on the platform, but common fees include trading fees (maker-taker fees and flat fees), and withdrawal fees. CEXs may also be subject to regulatory scrutiny, which can affect your ability to trade or withdraw funds.

Compared to other methods, CEXs offer a convenient, user-friendly way to convert Bitcoin to cash, especially for beginners. They provide high liquidity, support for trading digital assets with fiat currency, and compliance with financial regulations. However, there are security risks as CEXs are often targeted by hackers.

Crypto debit cards

There are several crypto debit cards on the market, each with different perks and fees. Coinbase, for example, has been described as the best overall Bitcoin debit card, with multiple security features and support for multiple cryptocurrencies. It does, however, charge a 2.49% cryptocurrency liquidation fee. Crypto.com's Visa card supports 19 different cryptocurrencies and 20 fiat currencies, with cashback of up to 5%. Wirex supports 25 cryptocurrencies and charges no issuance, monthly or withdrawal fees for US residents.

To get a crypto debit card, you'll usually need to create an account with the provider and pass KYC checks. You may also need to purchase the card or invest in the card's native currency to unlock certain benefits.

Peer-to-peer (P2P) exchanges

A peer-to-peer crypto exchange allows you to sell your Bitcoin directly to another individual in exchange for cash. This method offers lower fees and the ability to negotiate with the buyer on price. It also does not require ID verification.

Using a P2P exchange involves sending Bitcoin directly from your digital wallet to the buyer's wallet. In turn, you will receive payment through Zelle, PayPal, or another method of deposit to your bank account.

Some popular P2P exchanges include LocalBitcoins, Paxful, Hodl Hodl, Binance, KuCoin, and ByBit.

The downside of P2P exchanges is the risk of losing your funds (for example, if Bitcoin is sent but no cash is received) and the time it takes to sell, as you need to find a prospective buyer and negotiate the sale.

To ensure a safe sale, it is recommended to use a third-party platform with an escrow system, like Local Bitcoins. This holds the Bitcoin in escrow until the seller receives the payment. Face-to-face transactions are also possible, but caution should be exercised when dealing with large amounts of cash.

Bitcoin ATMs

A Bitcoin ATM (automated teller machine) is a kiosk that allows people to buy and sometimes sell Bitcoin and other cryptocurrencies using cash, credit, or debit cards. They are connected to the internet, allowing users to connect directly with a Bitcoin exchange. Bitcoin ATMs are usually found inside retail stores, shops, taverns, restaurants, malls, or airports.

The process for buying and selling Bitcoin from a Bitcoin ATM is straightforward. When buying, you enter the amount to purchase, provide your Bitcoin wallet address by scanning the QR code, pay, and then receive the Bitcoin in your wallet. When selling, you enter the amount to sell, send the Bitcoin to the provided address, and then take your cash.

There are tens of thousands of Bitcoin ATMs worldwide, with the majority located in the United States. As of September 2021, there were over 24,700 Bitcoin ATMs in the US, up from 2,342 in January 2018. In the European Union, there are 1,026 Bitcoin ATMs, with Spain, Austria, and Poland being the countries with the highest number.

It's important to note that the commissions on Bitcoin ATM trades can be very high, so it may be worth considering other options for cashing out your Bitcoin.

Gift cards

Cashing Out Bitcoin with Gift Cards

Where to Buy Bitcoin with Gift Cards

There are several reliable websites that allow you to buy Bitcoin with gift cards:

• LocalCoinSwap: This is a peer-to-peer cryptocurrency marketplace that connects buyers and sellers directly, allowing you to exchange gift cards for bitcoin securely and without the fees and restrictions of centralized exchanges. LocalCoinSwap supports a wide range of gift cards, including Amazon, Google Play, iTunes, Walmart, Uber, and more.
• Paxful: Paxful is another popular peer-to-peer platform that offers over 300 different payment methods, including gift cards. You can buy bitcoins with as little as a $1 gift card credit from various retailers, such as Google Play, Target, Amazon, and Xbox. Paxful also provides a secure escrow system to protect your transactions.
• Purse.io: This platform is a bit different from the others as it specifically caters to Amazon shoppers. You can exchange your Amazon gift card or unused Amazon balance for bitcoins by helping a shopper buy items on Amazon. Purse.io allows you to sell any fraction of the card value, not just the denominations printed on the card.
• Coinsbee.com: With Coinsbee, you can buy payment cards, mobile top-ups, or gift cards with Bitcoin or other cryptocurrencies. They offer over 3000 brands in more than 185 countries and support more than 200 different cryptocurrencies as payment methods.

Tips for Buying Bitcoin with Gift Cards

When buying Bitcoin with gift cards, it's important to keep a few things in mind:

• Compare rates and fees: Different platforms may offer varying exchange rates and fees for buying Bitcoin with gift cards. It's worth shopping around to find the best deal.
• Research the platform: Before choosing a platform, be sure to read reviews and only use reputable exchanges to prevent your personal information or coins from being stolen.
• Understand the process: Each platform may have slightly different processes for exchanging gift cards for Bitcoin, so be sure to read their instructions carefully.
• Protect your Bitcoin: Once you've purchased Bitcoin, consider storing it in a secure wallet, such as a hardware wallet, rather than leaving it on an exchange, which can be risky.

Frequently asked questions