Can Cryptocurrency be converted to cash?
Can you trade in your Bitcoin for cash, or is it simply a digital currency that can’t be touched?
This blog post will help answer this question.
We’re going to discuss how cryptocurrency works and the best ways to convert it into something tangible, like U.S. dollars or any fiat currency of your choice.
Can Cryptocurrency be Converted to Real Cash?
The answer is yes, but it’s not that simple. In order to convert your bitcoins into dollars, you need a bitcoin wallet or an account with one of the many cryptocurrency exchanges which allow trading in bitcoin for fiat currency like U.S. Dollars or Euros.
A lot of people ask this question when they first learn about Bitcoin and other digital currencies.
If you want to convert your coins or tokens into something tangible like US Dollars, then you need to find a cryptocurrency exchange like Binance or Coinbase that trades in your desired currency.
Lets take Binance for example:
There are 3 ways to convert your cryptocurrency straight into your local currency.
#1. Convert Your Crypto into Cash with P2P Trading
With P2P trading, you send one cryptocurrency to another person and receive cash in return. The coins are converted on a rate determined by the seller, which can be better or worse than current market values for either coin.
With the P2P option, you’d be able to sell Bitcoin directly to other Binance users to exchange them for your local fiat currency.
You can browse a variety of crypto listings to shop for the best offers on coins from other users.
To place an order, you must first place your Bitcoin (or other cryptocurrencies) into the P2P wallet portion of your Binance account.
#2. Sell Bitcoin into Cash on Binance’s Buy and Sell Crypto Page
This option is the most direct route to converting your Bitcoins into cash. You can sell Bitcoin directly for fiat currency on Binance’s Buy and Sell Crypto page, which is broken down by region:
- US Dollar (USD)
- Euro (EUR)
- British Pound Sterling (£GBP)
- Etc…
For a streamlined manner of selling Bitcoin and turning that into cash, this Binance withdrawal method offers a simplified and secure way for you to directly convert coins into USD, EUR, and other currencies you may need at the moment.
#3. Trade Your Bitcoin for Fiat and Withdraw Them From Your Account
Here all you need to do is to sell Bitcoin in the corresponding trading pair, then withdraw the fiat currency you earned from that transaction.
With this option, you can convert your Bitcoin to USD, EUR, and GBP without having to go through the process of buying another cryptocurrency for it.
How About Converting Cryptocurrencies to Cash on Other Exchanges?
There are over 500 crypto exchanges available right now. My top favorite ones are:
- Binance (of course!)
- Coinbase
- KuCoin
- eToro
- Gemini
- Cex.io
- Kraken
- Changelly
- Coinmama
The process involved in converting your crypto coins to cash on these exchanges differs a bit.
However, from my experience most follows the same process. You’ll always see the pattern – move from wallet to exchange > convert to fiat or stable coin > sell or withdraw.
For instance, Coinbase only allows you to sell directly into your Coinbase fiat wallet before you’d be to withdraw to your desired bank.
After selling to your Coinbase fiat wallet, you can choose to either cash out funds to your bank account or repurchase cryptocurrency on the platform.
You will find helpful tutorials or documentation on how to move cryptocurrencies and converting them into equivalent paper money value on your exchange of choice.
You should also be aware that these platforms typically charge a small fee for their service but they make it very easy to convert your crypto back into cash in a matter of minutes. Sometimes hours.
Advantages and Disadvantages of Converting your Cryptocurrency into Cash.
First lets start with the advantages:
Advantages of Converting your Cryptocurrency into Cash
Some advantages of converting cryptocurrency into cash are as follows:
1). It helps you to manage your cryptocurrency wisely
You can use cash in case of an emergency, or unforeseen events that may happen with the price of cryptocurrency on the market.
It is also a good way for day traders and those who want to invest their money more safely.
If one decides to convert his/her currency into fiat during a bear market then he/she will be able to buy back at significantly lower prices than they would have been before converting it into cash when bitcoin was being traded high.
2). Sense of security
Converting cryptocurrency into cash can help to provide a sense of security for the investor.
In this way, if something were to happen with the investment or company, it could be easier for investors to recoup their losses than if they had not converted and held on to the digital currency.
3). Less worry on fluctuations
There is no need to worry about fluctuations in value when converting crypto assets into fiat money like when holding onto them as currencies.
This also helps prevent some traders from getting caught up in trying to predict crashes or rises which may not even occur; so there’s less risk involved overall by just exchanging your coins at any time you would want instead of waiting until an opportune moment that never comes.
Disadvantages of Converting your Cryptocurrency into Cash
Some disadvantages of converting cryptocurrency into cash are as follows:
1). Cash or fiat currency are controlled by the authorities
One of the disadvantages of converting cryptocurrency into cash is the fact that these are controlled by authorities such as governments and banks. This means they can freeze, confiscate or keep tabs on your funds at any time.
In the crypto world, it is not so.
A lot of people have complained about this because it affects their ability to move money around freely without having to worry about government interference.
2). Fees and Taxes
Another disadvantage of converting cryptocurrency into cash is that there are sometimes fees for the trade/conversion.
In addition, when it comes to taxes you will need to pay income tax on any profits made from selling your crypto coins.
In the crypto world, these fees and taxes don’t exist which means they have a higher rate of return in comparison with fiat currencies.
3). International Transfers
Another disadvantage is that when converting your cryptocurrency into cash it may take a while and there are usually high fees involved which can sometimes make the exchange not worth it.
This issue doesn’t exist in the crypto world because you can send money anywhere around the globe, almost instantly with no cost associated.
Converting to fiat currency also means having to go through KYC checks (know-your-customer) before being allowed access; this isn’t necessary for transferring funds between wallets or exchanges as everyone has already provided identification information upfront.
In addition, if someone wants to convert their cryptocurrencies into cash they will need an address of where these currencies should be sent to so banks know who owns them.
4). Security
If you are a trader or someone who keeps their cryptocurrency on an exchange like Coinbase for investing purposes, then converting your coins to cash is not recommended.
This will prompt the company holding them to put in place extra security measures such as two-factor authentication and locking accounts after login attempts until they verify everything with you.
This can sometimes take days – it’s more secure this way but also much slower than just sending your money overseas via crypto transfers.
With fiat currency, there are no such restrictions when wanting to transfer funds between banks.
To summarize:
Converting cryptocurrencies into fiat currencies comes with its own disadvantages that don’t exist within the digital world of cryptocurrency trading where transactions happen instantaneously without any cost attached.
FAQs on Converting Crypto to Cash
How do I cash out Cryptocurrency after making profit?
Yes, you can cash out your crypto asset after making profits.
For any exchange at all, you have to, first of all, convert your cryptocurrency into fiat currency and then withdraw the money from your exchanger.
However, if you have your coin stored in a crypto wallet, you must first move them from your wallet to an exchange. Then you proceed from there.
This is because most crypto wallets don’t support withdrawal. They are mainly meant for storage.
Is converting Bitcoin to cash legal?
The short answer is: Yes, it’s legal to convert Bitcoin into cash. You’ll need a bank account for this process so you can deposit the money and withdraw it as well.
The process still remains the same. Convert to fiat money equivalent > withdraw to your bank.
However, there are some restrictions on trading that make conversion difficult – restriction in many countries makes cryptocurrency trading illegal or dangerous because of the high risk of fraud.
Where can I exchange cryptocurrency for cash?
You can exchange your cryptocurrency coins or tokens for cash on exchanges.
Besides serving as a platform for buying, trading, and staking cryptos – exchanges are the best place to exchange your cryptocurrency for cash.
Below are 3 favorite crypto exchanges:
- Binance
- Coinbase
- KuCoin
Is cryptocurrency a good investment?
The right answer to the question if cryptocurrency is a good investment or not is Yes and No. Or it depends.
If you believe in the cryptocurrency, knowledgeable enough about it, and want to invest in it, then yes.
But if you are not sure about how cryptocurrencies will be used or adopted by people and lack the basics, then no.
If your investment is a long-term one (more than two years) investing in crypto might be worth considering because of its potential.
Is there any future in cryptocurrency?
In my own opinion, Cryptocurrency is the future.
Cryptocurrencies are an emerging form of currency.
It is no less than a game-changer because it has given people the power to control their own money and transact without relying on banks or governments.
Cryptocurrency is designed to change the way we all live.
I have researched and studied the topic for more than two years, and it is my opinion that cryptocurrency will be a long-term investment as there are many investors who believe in its potential to change the lives of people all over the world.
It has been said by experts that digital currencies like Bitcoin can serve as alternatives to traditional investments.
The world is changing and it’s time for us to keep up with the evolving technologies.
How do I deposit money to crypto?
To deposit money or convert your paper money into crypto, all you have to do is:
Set up an account on a cryptocurrency trading site/exchange like Coinbase.com or Binance.com that accepts your form of payment and deposit money into the account they have set up for you.
Next…
Once the funds are in your account, go to the buy/sell section which will show all available cryptocurrencies to trade with (most sites offer Bitcoin), find one that is interesting, and convert it into its equivalent amount in cryptocurrency by clicking Buy (or Sell) button next to it.
After this purchase has been completed successfully, it should be visible on your portfolio screen right away.
If not, wait about 30 minutes before checking again because transactions take some time to process due to network congestion when there’s a high activity from traders using a particular exchange.
Final Thoughts
This article has been written to provide an overview of how cryptocurrency can be converted into cash.
Cryptocurrency can be converted to cash or any fiat currency if your choice into the crypto coin equivalence of your country’s fiat money.
It’s important to research the exchange before choosing it, in order to avoid scams or being scammed.
