Whether you are a crypto investor or an entrepreneur who accepts bitcoin, there will come a time when you need to cash it out or make a withdrawal. The process requires a lot of precautions to avoid losing your money. One thing to know is that it entails converting your bitcoin to cash through a bank account or online payment system.
Although there are few cases of hacking that have cost people their bitcoin, it is a pretty safe online process when you follow the recommended steps. As a beginner, this guide will be very valuable to you. Therefore, read it carefully and implement these steps. But before you make the final decision on cashing out your bitcoin, it is crucial to make the following considerations.
Where do you want to deposit your money?
What currency do you want to change the bitcoin into?
How much are you willing to pay as a commission?
These questions will come in handy in making the right decisions, and this is crucial especially if you really need the money urgently. For instance, some online payment methods only accept certain types of currencies. Probably, you will have to check if your preferred currency is supported.
So, by now, you already know that withdrawing bitcoin involves converting the digital coins into money. You can eventually use them as cash or for cashless options once the money is in your bank account, mobile money account or online payment account.
Basic Things to Know
Using bitcoin allows people to be in control of their wallets, whether they are using third parties to manage them or are doing it by themselves. In this case, you have to secure your wallet through all possible means at all times.
With bitcoin, you can withdraw or convert it into cash as long as you have a minimum of 0.001. The maximum withdrawal is capped at $2,000 worth of bitcoin per day. For people with higher withdrawal needs, it is unfortunate because they have limited maximum withdrawals further to $5,000 of bitcoin per week.
The bitcoin price against the US dollar changes at any minute. It can move either up or down. As we all know, cryptocurrency is a relatively young market. However, it is notable that bitcoin has been doing well so far. You probably have nothing to fear for now.
The bitcoin blockchain does not allow for the reversal of transactions. Once transactions have been initiated, only the bank or the online payment platform can refund the bitcoin if you wish to cancel. To avoid any kind of fraud, these institutions will rarely do this. Therefore, you must be very careful when withdrawing to avoid either sending the withdrawal to the wrong account or selecting the wrong amount.
Bitcoin is not ultimately anonymous. Yes, if you are surprised, you are not alone. With bitcoin, you will have to do some homework on how to increase your privacy. Some third-party solution providers can do this for a fee. In general, you ought to be careful about how you go about this.
Withdrawing or cashing out bitcoin may attract some taxes depending on the country where you are. Basically, the government of different countries taxes such transactions, and it is upon you to check if there is any tax to be paid to avoid surprises.
Withdrawal Using a Third-Party Broker (Exchange)
If you have experience with cryptocurrency, you will agree that using an exchange to withdraw money and buy and sell bitcoin is very common. There are many benefits of doing this including reduced risks and free guidelines on how to use the exchange. Needless to say, it is an easy process.
If your broker allows you to deposit fiat money from an account or online money payment platform, then you are good to go. But if they do not, you will probably have to look elsewhere for help. In many cases, they will allow users to withdrawal through the same bank account they used to deposit.
Many brokers observe the money laundering laws, but it is your responsibility to confirm this as a precautionary measure. Major brokers who are known worldwide to be reputable observe all these laws, which is a great thing.
When using a third-party broker or exchange, the average waiting time after initiating the withdrawal process is five days. It could be more or less depending on many factors. The good news is that they will advise you on the process, and they are willing to offer the necessary support when it is needed. Therefore, cashing out bitcoin is not ideal for someone who is in urgent need of money. Fortunately, the process is pretty simple and straightforward.
1. If you already have an account with an exchange broker, then you are a step ahead. But if you do not have one, the first step is to open it. Make sure that the broker you choose has all the services that you will need even after cashing out the bitcoin. If you have been managing your wallet, it is time to consider a broker now that you have the opportunity.
2. Link the account to which you wish to withdraw your bitcoin. It could be a bank account or an online payment account. Many brokers now provide numerous options that are globally acceptable. As this is happening, you should be getting notifications through your email from your account to inform you that transactions have gone through.
3. Navigate to the sell button. Your wallet will be indicated and also the default currency depending on the country or the broker. For instance, it will show USD for US citizens, while it will show EUR for EU citizens. However, one can often change this to another fiat currency as long as it is supported by the platform. Again, the capping limit will be shown on the dashboard just to guide you.
4. The next step is to sell the bitcoin instantly, which will convert the bitcoin into the fiat currency. Now that it is in the fiat wallet, you can transfer it to your bank account.
5. The last step is to withdraw the money to the bank account, which is a straightforward process. It will take a couple of days for the deposit to be reflected in the bank account. As long as the transaction has been approved, which is very important anyway, you have nothing to fear.
As you can see, using a broker sounds like a great option for withdrawing bitcoin. According to NakitCoins experts, there are some other options that you can explore as well. Sometimes, this might not be the most favourable method after you have assessed the situation.
Do you want to obtain the cash more quickly? Well, the peer-to-peer method is very fast. You will still need a platform that supports these processes especially for protection now that you will be selling bitcoin to people who you do not know.
According to experts in the cryptocurrency industry, this method is highly preferred by people who want to sell just a fraction of a single bitcoin. The smaller the fraction, the faster you are going to sell it.
P2P is flexible because many platforms let sellers choose how they want to get paid so that buyers who are comfortable with such a method will just buy. The wait time is relatively low from being almost instant to a couple of days depending on how fast buyers will be interested in your transaction. If you want a quick transaction, choose a P2P platform that has a good reputation and high traffic. Here are some of the selling options.
· Cash deposit – the buyer will deposit money in a preferred currency into your account. In most cases, it is not a problem because many P2P transactions occur in the same country. Cash deposits make the process of cashing out bitcoin twice as quick compared to the process of using a broker. However, there are risks that are involved, and many people do not prefer the method, which can result in a long wait before you can find a buyer.
· Bank transfer – this is the same as depositing cash in a bank only that the buyer will wire the money into your account. The time it will take to be deposited may vary depending on many factors. Proof of ID is needed to show that the money has been sent to your account. Money can also be sent to your online payment account like PayPal or Payoneer, and a proof of payment will be sent to you.
The P2P platforms that are reputable usually have strategies for protecting both buyers and sellers of bitcoin and other digital coins. It is no wonder that it is highly recommended to use them. If you choose a platform that is known for positive performance, you might have fiat cash in your account within minutes or a few hours. The process is almost like using an exchange platform, and we have the details here.
1. For those with an account with a P2P platform already, they may have enjoyed the process before and can attest how easy it is. If you do not have one, this is the time to do so and link your wallet and other accounts. Your account can be web based or an app on your mobile phone. Be sure to select a username and a password that is strong and only known to you.
2. Choosing the desired country is a prudent idea so that buyers in that country will quickly see your offer. This will also make it easier to deposit money into your bank account or even meet to exchange the cash. For online payment systems like PayPal, the buyer can be in any country. P2P transactions are simpler if they are performed in the same country.
3. The other important step is to choose the preferred mode of payment so that the buyers can know everything from the beginning. Remember that they also have preferred modes of payment depending on what is easiest. The selection for the two of you must be the same. For your part, it is better to choose popular payment modes. You can research more about what is trending to avoid further delays.
4. Enter the amount of bitcoin that you would like to cash and leave the rest to the platforms. Usually, people find matching buyers and notify them about the transactions. They will look at the transactions. If they are still willing to buy, they will go ahead and process as per the instructions.
5. When they have bought your bitcoin, you will also be notified. Then, you can complete the process on your end. This is where you do all the confirmation like checking the bank balance, receiving a proof of ID and ensuring that indeed the buyer has put the money into your account.
After all this, you will have been successful in cashing your bitcoin using the P2P process. The truth is that many uncertainties may develop, and you should be prepared. After all, dealing with cryptocurrency is a risk.
Cashing Out Through a Friend or Someone You Know
If you have been browsing through social media lately, you will see people selling their bitcoin for instant cash. Likewise, these transactions are made within the social circles of known friends and relatives. If you are in dire need of money, you can sell your bitcoin for cash within such social circles.
The process is pretty simple as soon as you find a potential buyer. The buyer must be willing to give you the cash for the current value of bitcoin. Then, you will just send the bitcoin to the buyer’s wallet address. Once both parties have confirmed that everything looks good and fair, the transaction process will be considered complete.
Indeed, this guide is long, but it is insightful for both beginners in cryptocurrency and those who are experienced. Maybe there was something you did not know, and now it can help. Ultimately, you have to be cautious to have a smooth, secure and fast bitcoin withdrawal process.