Originally published in the NOWPayments blog
Cryptocurrency is an exponentially growing market that holds the potential of replacing fiat currencies one day. However, as of now, only a handful of companies and individuals leverage cryptocurrencies to facilitate transactions.
This is why you have to convert your cryptocurrencies into fiat currencies. Another important reason to do so is when there is a decline in the market. If you observe the value of a cryptocurrency is sinking, it would be a wiser call to withdraw your crypto in cash.
Smart Methods to Cash Out Your Cryptocurrencies
Now that you have decided to withdraw your cryptocurrency, you have to determine which medium you should utilize to do the same. Below we are presenting you with some of the best ways to withdraw cryptocurrencies:
1. Cryptocurrency Exchanges
You can sell off your crypto coins in cryptocurrency exchange and, in turn, acquire fiat currencies. The money can be sent directly to your bank account. While not the fastest way, it is certainly an easy and safe way to convert your coins.
The whole process will take around four to six business days. Moreover, this time period depends on the country and the exchange you have selected. Following is the process of converting your crypto into cash via exchanges-
- Sign up to the exchange and execute the verification process
- Deposit the cryptocurrencies into the account
- Cash-out the coin to fiat through Paypal or bank transfer.
Best Cryptocurrency Exchange
In order to ascertain that you have a seamless and secure transaction, it is imperative to choose a reputable cryptocurrency exchange. The following are some of the most reputable crypto exchanges in the market:
A good thing about choosing a cryptocurrency exchange is that you get reliable support, making it easier to execute the whole process. Moreover, many exchanges also provide anonymity. You do not have to create an account, and all the data will be removed from the site after the transaction.
2. Crypto ATMs
Contrary to standard ATMs that allow you to withdraw currency from your bank account, a crypto ATM is a physical unit that enables you to purchase or sell cryptocurrency with fiat currency. Presently there are around 7,700 crypto ATMs across the world.
You will come across different types of crypto ATMs. Therefore, it will be wiser to be more informed about them as they all have different functionalities. And you can access websites such as Buy Bitcoin Worldwide, Bitcoin ATM Map, Coin ATM Radar, etc. to locate this physical unit near you.
Investing in a crypto-ATM is a faster way of acquiring cash than registering and authenticating the account on a cryptocurrency exchange. Moreover, the processes can be highly anonymous based on the ATM machine.
How to Withdraw Money from Cryptocurrency ATM?
While different providers install distinctive processes, the general process of withdrawal involves the following steps:
- Initiate the process by creating an account with the ATM. The process is easy and free, and you can do it on your smartphone.
- Considering that you are withdrawing, you must already have a crypto wallet. You would need the wallet address to execute the process.
- Login to the account on the ATM and select the option “Withdraw Cash.”
- Enter the amount you wish to take out and send the crypto to the wallet address through scanning a QR code
- Once the cryptocurrency network verifies and completes the transaction, you will receive your cash. The whole process will take up to thirty minutes.
Also note that all ATM providers charge certain transaction fees, which vary between 7% and 12%.
3. Crypto Debit Cards
Many websites enable you to sell and buy cryptocurrency through a prepaid debit card. These cards can be used as a standard debit card. Moreover, these cards are powered by Mastercard or VISA. This implies that debit cards can be used to perform online and offline transactions across the globe.
Take your crypto debit cards to stores that accept Mastercard and VISA. Additionally, some of these debit cards hold crypto top-in in specific coins and only convert them when you are making a transaction. However, some cards convert the currency into fiat instantly after you top them up. You can also connect these cards to your bank accounts, allowing you to seamlessly choose between cryptocurrency and fiat currency.
4. Peer-to-Peer Marketplace
In case you do not completely trust the process of exchanges, you can leverage peer-to-peer transactions. You can secure your coins in a wallet (software or hardware) and choose a peer-to-peer marketplace to sell your cryptocurrency coins in exchange for fiat money. A reliable platform offers escrow services so you can be confident about the authenticity of transactions. You and the buyer can decide how and when to meet and exchange the funds.
While a highly flexible exchange method, it is also subject to many scams. Therefore, you must ensure to select a secure platform.
Take Advantages of Your Personal Contact
If you know someone who regularly deals in cryptocurrencies, then you can get their help. Choosing a cryptocurrency enthusiast whom you know allows you to make a better deal. And considering your relationship with your friend, he or she might agree with you.
This is one of the best methods to get cash in a fast way without having to bear any transaction fees. It is wiser to liaise with more than one known person. It will provide you with opportunities to evaluate the options you have and choose the best amongst them.
What to Understand Before Exchanging Cryptocurrency for Cash?
Prior to converting your cryptocurrency coins to fiat money, the following are some caveats that you should consider:
When you convert cryptocurrency to fiat and while sending the money directly to the bank, you have to look out for the fees. To execute this process, exchanges levy certain transaction fees. Check out the fees charged when using different methods and then make a final decision.
If there are financial transactions, there are taxes. Certain jurisdictions dictate that the profit you earn from selling the crypto for cash is taxable. However, some countries are yet to figure out their stand on cryptocurrencies and taxes. While you may think of dodging the tax, exchanges tend to report the tax authorities’ profits when you withdraw the money. So it is better to be aware of the taxes and comply with the rules associated with them.
Which is the Safest Way to Cash Out Your Cryptocurrency?
Directly selling the cryptocurrency to your friends is among the most secure ways to get cash. You can be in touch with them while the transaction occurs and also acquire the cash instantly.
A reputable cryptocurrency exchange also proves to be a reliable way to change cryptocurrency into cash. But there is always a risk of hacking, and your transaction can be sent to another bank account or wallet. Moreover, there are also chances of your personal data being exploited.
Which is the Most Cost-Effective Way of Cryptocurrency Exchange?
When you sell your cryptocurrencies directly to a friend or an acquaintance, it eliminates the transaction fees. So if you want to save money in this process, try gathering as many friends as possible who would want to buy coins.
Cryptocurrency exchanges are also a relatively economical way of getting cash from selling your cryptocurrency. While there are transaction fees, they are minimal. The maximum fees charged by exchanges go up to 2%, and some of the platforms do not even charge any fees. But the drawback is that you have to wait for a week or so to get your money.
Which is the Fastest Way of Converting Cryptocurrency into Cash?
Getting your money from a cryptocurrency ATM is the fastest way of exchange. But their availability remains limited to big cities.
Another quick way of cashing out cryptocurrency is through the crypto wallet. You can create a selling order within five minutes. Getting buyers for your order can take hours or if you are lucky, some minutes.
With growing research and development, cryptocurrencies have become more affordable and accessible. They provide businesses and individuals with a safe and efficient avenue to execute the transactions.
But cryptocurrency still lacks mainstream adoption, creating the need to exchange your digital coins to fiat money. Above, we have highlighted some of the effective ways to execute this conversion. Each of the options has its strengths and weaknesses, and it is up to you to decide based on your preferences.