How to Cash Out Bitcoin in 2022 – Most Updated Guide
Investing in Bitcoin can be one of the most interesting experiences someone can have. There are several ways to go around it, and you may discover something new about it each day! If you’ve already invested in Bitcoin and want to start enjoying all its benefits, you must learn how to cash it out.
It’s important to note that there are different methods for cashing out Bitcoin, and each of these methods has different fees, bank fees, and limitations. Taking that into consideration, it’s vital for you to learn about all the possible methods you have available to cash out Bitcoin; that way, you can choose the one that adapts to your needs the best.
In this guide, we’re going to tell you how to cash out Bitcoin in 2022 by reviewing all the available options at the moment. If you have Bitcoin in your digital wallet, and you’re ready to transform it into cash, keep reading this review!
Why Would You Transfer Bitcoin to a Bank Account?
In the case that you’ve already invested in Bitcoin, you may be wondering why you would cash it out. Many financial experts believe that Bitcoin may surpass fiat currencies and traditional payment methods in the future, so exchanging it may seem like a bad thing.
However, Bitcoin is not fully accepted internationally. Several businesses worldwide are still reluctant to implement Bitcoin into their business model, meaning that you may have to exchange your Bitcoins for fiat currencies to make a purchase.
Currently, some businesses accept Bitcoin as payment, so you may keep them in mind. There may come a day in which most businesses accept Bitcoin as payment, but until then, you have to manage your financials to adapt to the current circumstances.
On the other hand, Bitcoin is still considered a highly volatile asset, meaning that its price is continually going up and down, depending on what’s happening in the world at the moment. Some people prefer to exchange some of their Bitcoins into fiat currencies because they believe they can save some money that way.
There’s no way to tell how Bitcoin’s value is going to change over time, but if you want to keep your investment safe, you may want to transfer Bitcoin to a bank account to save some of that money.
What to Consider Before Cashing Out Bitcoins
As mentioned before on this page, you can cash out Bitcoin by using several different methods, and you may choose the one that fits your needs the best. Regardless of the method you want to use, there are some things that you must keep in mind before you make your first transaction.
In this review, we’re going to go over the most common factors you may want to consider before cashing out Bitcoin in 2022.
Transaction and Processing Fees
Most cash-out methods for Bitcoin are going to charge you a particular fee for processing your transactions, especially if you’re working with a Bitcoin exchange platform (We’re going to dive deeper into this method later).
Overall, you must be aware of the fees that come with your method of preference; that way, you can be prepared for your next transaction and make adjustments to the amount you’re going to transfer accordingly.
It’s important to note that you may get charged different fees depending on the currency you want to change your Bitcoins to. For example, a Bitcoin exchange platform may not charge the same fees for USD conversions as it would for EUR conversions.
The only instance where you may not get charged any fees is in a direct transaction to another person. However, you need to be careful when making an exchange with this method since there are little to no security regulations.
Withdrawal Amounts
You must review the amount you want to withdraw from your bank account before you make the transaction. Keep in mind that some banks and countries have certain regulations regarding big cash outs, so you need to assess them if you don’t want to get your account frozen or limited.
On the other hand, many Bitcoin exchanges tend to charge bigger transaction fees for bigger cash outs. Make sure to review all the required fees for the method you’re planning on using if you want to avoid any unexpected processing fees.
Depositing Money into PayPal or a Bank Account
Some people find PayPal transactions more convenient and quicker for Bitcoin since the platform also works as a Bitcoin wallet now. If you want to avoid some regulations and processing fees, you may want to use PayPal to receive your funds.
However, not all crypto exchanges accept PayPal as a cash-out method, so you must research before you make any transactions. Remember that PayPal is still relatively new to the Bitcoin market, so most platforms only accept bank payments.
Waiting Periods
Depending on the type of transaction you made, you may have to wait a particular number of days before you see the funds in your account. Some Bitcoin exchanges inform you of the average amount of days it can take your funds to reach your account but keep in mind that those are estimates.
Typically, the number of days you have to wait depends on the time it takes your bank to process the transaction and place the funds into your account.
Regulations and Limitations Among Countries
Many countries have particular limitations regarding Bitcoin and cryptocurrencies in general. For example, Bitcoin is currently classified as property under U.S. tax laws, meaning that you may have to pay taxes for your Bitcoin income.
If you want to make sure about the regulations your country may have for Bitcoin cash outs, make sure to look up your country’s tax laws and regulations for cryptocurrencies.
How to Exchange Bitcoin for Cash
Now that you’ve learned of all the things you have to keep in mind before choosing a cash-out method, it’s time for you to learn how to cash out Bitcoin. Remember that there are several different methods at your disposal, so we’re going to go over each one of them in this review.
Once you’ve read through all these methods, you’re free to choose the one that feels more convenient for you.
Direct Transaction
If you want to avoid most transaction fees, you can look for a direct seller. There are several people on the internet offering their trading services in which you send them the number of Bitcoins you want to exchange, and after some time, you receive the equivalent amount in the fiat currency you requested.
Additionally, you may know a friend or relative who exchanges Bitcoins for fiat currencies. If you want to make an exchange with those people, you’re free to do it as long as it’s safe for you.
We don’t usually recommend direct transactions since many scammers are actively trying to steal your money or information. If you don’t know the person that you’re transferring your funds, it’s better if you stay away.
Some platforms serve as a broker between the buyer and the seller. These platforms are typically safer than transferring your funds directly, so if you want to buy and sell Bitcoins with this method, make sure that you’re safe with it.
Third-Party Brokers (Bitcoin Exchanges)
Third-party brokers are the most common method to exchange Bitcoins. If you’re new to Bitcoin, you may want to go with the safest method possible, which is this one. However, keep in mind that this method usually has several processing fees, so make sure that you read about your preferred exchange platform’s fees when you get the chance.
What is a Bitcoin Exchange?
A Bitcoin exchange is a platform where people deposit Bitcoins to make exchanges. Once the funds are available in the exchange, you can choose to request a withdrawal in your preferred fiat currency. Typically, users go with bank transfers, although some platforms allow you to use PayPal transfers too.
To avoid certain legal issues, most exchanges require you to withdraw your funds to the same account you used to make the deposit to avoid money laundering. Besides that, the process to exchange your Bitcoins for fiat currencies with an exchange platform is relatively easy.
There are hundreds of Bitcoin exchanges that you may use for your transactions, but not all of them work the same way or offer the same fees. Currently, we recommend that you use a platform such as Coinbase, Kraken, Bittrex, or Binance. All of these are reputable crypto exchanges that you can use to exchange your Bitcoins safely with low processing fees.
What to Consider Before Making a Transaction With a Bitcoin Exchange Platform
If you decide to go for the Bitcoin exchange method, here are some things that you must consider:
Using a Bitcoin exchange platform often requires significant processing of each transaction, meaning that it takes longer for your money to reach your account. Depending on the platform you use, your money can take from one to five business days to reach your account.
Thankfully, most Bitcoin exchanges give you detailed information regarding how much the fees are going to be, how much time the money is going to take to reach your account, and more.
Another important thing to note is that most platforms only allow you to cash out Bitcoins into the account you used to make the deposit. People who haven’t used their bank account to buy Bitcoin may purchase a small amount before making their first transaction.
Regarding fees, they may vary depending on the bank you’re using to deposit and withdraw your funds. You may get charged additional fees depending on the currency you want your Bitcoins changed into.
Finally, most secure crypto exchanges work under strict cybersecurity guidelines. These platforms often require you to send proof of identification to open your account. If you want to avoid problems with the platform you’re going to use, make sure to read its policies before you create an account with it.
Peer-to-Peer Transactions
As we mentioned before, some platforms allow you to buy and sell Bitcoin with other people. These platforms often allow you to use any payment method that you want, although most users go with bank transfers or PayPal/Skrill/Payoneer transfers.
Keep in mind that while Bitcoin exchanges are the most reliable method to exchange your funds, you don’t have that much control over fees, prices, and other factors. Peer-to-peer platforms allow you to negotiate with the other person to get to a much better buying/selling price.
Additionally, peer-to-peer platforms allow you to execute transactions anonymously, which can protect you from scammers. As long as you’re careful with whom you make business, peer-to-peer transactions are an amazing method to exchange your Bitcoins into fiat currencies.
What to Consider Before Making a Transaction With a Peer-to-Peer Platform
Peer-to-peer platforms are an excellent option for Bitcoin exchanges if you want to protect your identity. However, you must ensure that you’re working with a reliable platform and a reliable buyer/seller before making any transaction.
As mentioned before, peer-to-peer platforms allow you to discuss a payment method with the seller, so you may arrange a bank transfer, PayPal transfer, or more. Some people even feel comfortable arranging an in-person meeting to get paid in cash if you’re local.
Regardless of the method you decide to use, it’s important that you protect your information and money as much as you can. In essence, we recommend that you ask the buyer/seller for proof of identification and proof of payment before you release the Bitcoins to them. If you don’t do this, you may be exposed to scams.
Finally, we suggest that you go for peer-to-peer platforms that have an escrow service. An escrow service is a feature where the seller doesn’t receive the funds until the buyer confirms that they’ve received the product or service they wanted; this prevents fraudulent transactions and scams.
In the case of Bitcoin transfers, an escrow service means that you’re allowed to hold the funds from the seller until you’ve received the fiat currency in exchange, which adds an extra layer of security to your transactions.
Alternative Bitcoin Cash Out Methods
Bitcoin exchanges and peer-to-peer platforms are the two most popular ways to exchange your Bitcoins. However, there are other methods that aren’t as common but may work for you.
When it comes to cashing out your Bitcoins, it’s better if you have as many options as possible, so we’re going to go over these options in this review as well.
Bitcoin ATMs
Bitcoin ATMs work similarly to traditional ATMs, with the difference that a Bitcoin ATM allows you to buy or sell Bitcoins in exchange for fiat currencies. Currently, there are over 4990 Bitcoin ATMs across the globe, so you may check if you have one near your area.
A downside to these machines is that they generally have strict deposit and withdrawal limits, so if your goal is to manage big transactions, a Bitcoin ATM may not be for you. Additionally, transaction fees are much higher than with Bitcoin exchanges; some ATMs charge you between 7-12% of your total amount in fees.
Bitcoin Debit Cards
Some Bitcoin exchange platforms allow you to purchase a prepaid debit card with Bitcoins. You can use a Bitcoin debit card in the same way you would use a regular one since it’s powered by Mastercard or VISA.
Generally speaking, you may use these prepaid cards in any business that accepts Mastercard or VISA cards. At the time of the purchase, the system is going to make an automatic currency conversion, making them convenient for some people.
Another great thing about these cards is that you can use them to withdraw cash from traditional ATMs. However, keep in mind that these cards may have particular regulations, depending on the platform that provided you with the card.
Which Bitcoin Cash Out Method is the Right One for You?
If you’ve never invested in Bitcoin, it may be hard for you to tell which cash-out method is the best one for you. Keep in mind that every person has particular requirements, so some methods may be more appealing to them than others.
For example, people who want to protect their identity as much as possible may prefer to go for a peer-to-peer platform. Alternatively, people who want the exchange process to be as comfortable as possible may try to create an account on a Bitcoin exchange website and do the process quickly.
Overall, you must go for the method that suits your current needs. If you still can’t decide, we recommend that you go to either an exchange website or a peer-to-peer platform. These are the most common ways to exchange Bitcoins, so they aren’t as complicated as the other ones.
To put it simply, a Bitcoin exchange platform works better for beginners since the platform lays down all the processes for you. On the other hand, peer-to-peer platforms put you in contact with the seller so that you can negotiate with them anonymously, meaning that it’s better for experienced people.
How to Choose the Right Bitcoin Exchange
There are hundreds of Bitcoin exchanges on the internet today, making it difficult to go for a specific one. If you want to make a better decision, you must take these factors into account:
- Withdrawal Limits
- Deposit Limits
- Fees
- Payment Methods
- Limitations
You must choose the platform that fits all of your criteria regarding these parameters. Some of the most popular exchanges have competitive fees, so make sure that you review each one carefully to make a better financial decision.
As mentioned before on this page, we recommend the following exchanges:
- Coinbase
- Kraken
- Bittrex
- Binance
These are some of the top-rated websites to exchange your Bitcoins for fiat currencies. All you have to do is set up your account, verify your identity, make a deposit, and choose the amount you want to withdraw.
How to Prevent Frauds
People who have never invested in Bitcoin or don’t know how to cash out Bitcoin are more likely to fall into scams. Thankfully, scams are avoidable as long as you’re careful with your money.
We’re going to give you an overview of the most common fraud/scam indicators, as well as how to avoid them at all times.
Most Common Fraud Indicators:
Fake Websites and Mobile Apps
You’re likely to encounter several imposters and fake Bitcoin platforms from time to time. Many scammers are looking to profit off of beginners’ ignorance, so you must be aware of these websites.
Most fake websites are designed to look like reliable places where you can invest your Bitcoins. However, there are some small indicators that can tell you that they’re fake. For example, some of those websites try to sell you unrealistic fees or processing rates without any evidence to back up these claims.
Another way to identify scams is to check the website’s privacy policy. Scammers don’t take the time to provide evidence for their data protection policies, so they copy someone else’s privacy policy document. If you notice a suspicious-looking document, get away from there!
Suspicious Social Media Accounts
Some scammers also use social media to reach out to you and trick you into making an exchange with them. In some cases, the scammers may even set up bots to talk to you, making the scam even more evident.
We suggest that you avoid trading with strangers on the internet; if you want a peer-to-peer transaction, it’s best if you register at a peer-to-peer platform and follow all the security guidelines.
Scam E-mails
While it’s not as common as the other indicators, you may get an offer to join an exchange platform via e-mail. If you cannot verify the legitimacy of the e-mail or the “company” sending you the e-mail, mark it as “Spam” and avoid it.
FAQs
Can I Still Use a Peer-to-Peer Platform Without an Escrow?
You can still use platforms without an escrow if you don’t find one that suits your needs. However, keep in mind that escrows provide you with an extra layer of security at the time of making a transaction.
If you’re confident that you’re working with a trusted individual, you can make the transaction as long as the person provides proof of identity and payment before you release the Bitcoins to them.
Do I Need to Set Up a Bitcoin Wallet Before Joining an Exchange Platform?
You must have a Bitcoin wallet if you want to cash out your funds eventually. Most brokers offer the opportunity to set up your digital wallet in a few minutes. However, keep in mind that each platform may have different fees and processing requirements.
Do I Have to Always Cash Out My Bitcoins?
You don’t have to cash out your cryptos if you don’t want to. Most people make cash outs to save some money from crypto’s volatility or to get fiat money into their accounts. Regardless of the reason, you’re free to manage your money in any way you consider appropriate.
Bottom Line
Now that you know how to cash out Bitcoin, you can explore all the available possibilities and choose the best one for you. Remember that every cash-out method has particular features that make it unique from the rest, so you can spend as much time as you want to review your options.
