If you are an investor or someone who holds cryptocurrencies like Bitcoin, Ethereum, or other cryptocurrencies, you may think of cashing out your cryptocurrencies. But, how to convert your digital assets into fiat currency? What are the different ways, what benefits you will get, and what are steps you can take?
However, conversion may vary with your preference, location, and urgency. This article explores the common methods including conversion through exchanges, Bitcoin ATMs, P2P exchanges, and using brokers. This will provide a detailed analysis of the steps involved along with the pros and cons of each method.
1. Use a Centralized Exchange
Centralized exchanges like Binance, Coinbase, and Kraken, are some popular platforms that can be used to cash out your crypto holdings. This is often considered the easiest method if you already use any of the exchanges. You can check the trading rate and select the number of coins you want to sell from the platform itself.f
Steps to Cash Out Using an Exchange
- Create an Account: New users can register for a new account or log in to their existing account. Some exchanges may require verification such as KYC to comply with regulations.
- Deposit Cryptocurrency: Users can deposit their assets or transfer them if they are stored in private wallets. Select the cryptocurrency you want (like Bitcoin). Copy the wallet address and transfer it.
- Sell your Cryptocurrency: Once your wallet is funded, navigate to the trading section, and choose the currency you would like to sell. Place sell order at market order (for immediate selling at market price) or limit order (for selling a specific price).
- Withdraw Fiat Currency: Once your sale is completed, move to the withdrawal section of your account, choose how and where you want to receive your cryptocurrency (eg: bank) enter the amount of currency you want to transfer to your account. Re-check if any transaction fees or platform charges apply.
| Pros | Cons |
| High Liquidity and fast transaction | KYC is mandatory |
| Supports several cryptocurrencies and fiat currencies | Withdrawal fees may be high |
| User-friendly interface | Delays in withdrawal |
2. Use a Bitcoin ATM
Bitcoin ATMs can be easily used to sell Bitcoin for cash using a Bitcoin ATM. For that users can locate the nearest Bitcoin ATMs that support cash withdrawal. Some ATMs require verification of phone number. Follow the on-screen instructions to sell your cryptocurrency.
Transfer Bitcoin to the ATM wallet by scanning the QR code displayed on the screen. Check the amount of bitcoin you send matches with the equivalent cash you withdraw and confirm. Once your transaction is confirmed, the ATM will dispense the cash.
| Pros | Cons |
| Immediate cash without delays | High transaction fees may be levied |
| Intermediaries are not required | Limited restricted to some geographical areas |
| Technical knowledge is not mandatory | Limits on withdrawal amounts |
3. Use Peer-to-Peer (P2P) Platforms
P2P platforms such as Binance P2P, allow buyers and sellers to get connected directly without any intermediaries. P2P, as it doesn’t require any intermediaries, charges less fees. Here are the steps involved:
- Register on the P2P platform: sign up or log in on a trusted platform and complete if any verification is required.
- Post a Sell Offer or Select a Buyer: you can post the quantity, price, and preferred payment method for transfer. P2P also allows users to browse buyer offers and select one.
- Transfer cryptocurrency: once you confirm the payment, crypto from your wallet to their crypto wallets.
| Pros | Cons |
| Allows direct transactions without intermediaries | High risks of scams |
| Flexible payment methods like bank transfer, Paypal, or cash | Slow procession |
| Lower fees than centralized exchanges |
4. Over the Counter Service (OTC) or Broker Service
Broker Services and OTC services are considered good options for individuals looking for a personalized high-volume transaction. They are often lying close to the market price, making them a good option for those who require quick and market-price transactions. You can cash out your Cryptocurrencies by the steps given below:
- Choose a Broker or OTC service provider: choose reputable brokers or providers like Binance OTC or Coinbase OTC. Never choose unregistered brokers.
- Complete KYC requirements including personal details and identity verification.
- Contact the broker or OTC desk. Negotiate to agree on the amount, price, and terms of the sale.
- Send your crypto holdings to the broker’s wallet and receive payment once the transaction is confirmed.
| Pros | Cons |
| High-volume transactions at competitive rates | Requires the participation of third parties |
| Low market impact | Longer process compared to exchanges |
| Allows private services | Transaction limits may be higher |
Use Crypto Debit Cards
Crypto debit cards offered by Binance, Bybit, or Bitpay allow users to spend cryptocurrency directly or withdraw cash from ATMs.
- Apply for a crypto debit card: register with a provider and link your crypto wallet.t
- Transfer cryptocurrency to the card.
- You can directly withdraw cash from the ATMs that allow convert Bitcoin directly to cash.
| Pros | Cons |
| Allows direct spending of cryptocurrencies | Conversion fees are required for spending and withdrawing cash |
| Convenient for everyday use | Limited global acceptance of crypto debit cards |
| Quick access to money | Cards must be pre-loaded with cryptocurrencies |
When to Withdraw or Sell?
Withdrawal if Ideal for:
- Long-term storage
- Reinvest on another platform with lower transaction fees.
- Move your holdings to a more secure wallet
- Preparing for a P2P sale without using an exchange
Selling is Ideal for:
- Quick transfer to fiat currency
- To gain maximum profits during favorable market conditions
- Exit from the market due to declining or unfavorable market conditions
Conclusion
Cashing out your cryptocurrency holding by selling or withdrawing is crucial for managing a good portfolio and keeping your finances secured. Traders can use several methods using an exchange, Bitcoin ATMs, P2P platforms, brokers, or OTC services, or using crypto debit cards to cash out their holdings. It is important to understand your requirements and choose the service that aligns with your financial goals, with minimum transaction fees and regulations.
While withdrawals are ideal for securing and transferring your assets, selling provides immediate access and liquidity and access to fiat currency. However, it is essential to analyze your goals, risk tolerance, and the cost involved before deciding. Users should stay informed about regional regulations and market prices.