How to Withdraw Your Bitcoin: Cheapest Way to Convert Crypto to Cash

While the crypto market allows for extensive management and distribution of your digital assets, depositing funds into your bank account will eventually be necessary. This process can be trickier than you might expect, with several methods available.

Today, it's our main focus of discussion. We'll uncover a range of methods to cash out your crypto, ensuring you choose the most fitting approach.

Ways To Cash Out Your Bitcoin & Crypto

So, you've been investing in crypto and your digital holdings have increased in value. Now you want to turn that crypto into spendable cash. But how can you do that? First, let's go over the basics.

A crypto withdrawal is when you transfer crypto tokens to an external wallet or a crypto exchange, and it allows you to take full control over your holdings. You can withdraw all your money from crypto, but the ease of doing so depends on the sum and the method you use.

Besides transferring funds to an external wallet, you can also send it straight to your bank account for an easy cash-out. Transferring Bitcoin to a bank account requires these actions: convert BTC to fiat, link your bank account to an exchange platform, and confirm a transfer. Processing times can vary between platforms, so make sure to pick the crypto exchange wisely. Also, always double-check your bank account details before confirming the transfer.

There are several methods to cash out your crypto. The most popular ways to convert Bitcoin to cash include:

• Crypto Exchanges
• P2P Exchanges
• Bitcoin ATMs
• OTC Trading
• Crypto Debit Cards

Alright, let's unpack each option and see what they offer:

1. Cryptocurrency Exchanges

Crypto exchanges are the most popular cash-out method. They allow you to easily buy, sell, or trade different digital coins. One of their biggest perks is their user-friendly design so you can convert crypto to fiat within a few clicks. All you need is to pick the token and enter the exact sum to be sold. Then, you can move the funds to your bank account.

2. Peer-to-Peer (P2P) Trading

P2P trading lets you trade directly with another person. Thus, you can bypass the exchange and have more control over trading terms. Matching up with the perfect buyer or seller for your crypto trades can be tricky. P2P exchanges help streamline this process and some of the best services are Cryptomus and Binance.

P2P trading is considered the cheapest way to convert crypto to cash, thanks to typically lower fees compared to crypto exchanges. However, because P2P trading is implemented without a centralized exchange acting as a middleman, you might encounter unreliable buyers or even scams. To help you avoid these unpleasantries, all merchants on Cryptomus go through a KYC verification system, so you will always find a reliable seller to trade with.

3. Bitcoin ATMs

Bitcoin ATMs enable the withdrawal of tokens into real money within a shorter time frame. With the rapid emergence of physical ATMs, they are one of the convenient alternatives for people when they need cash in a hurry and wish to avoid the procedures of online trading platforms.

Unfortunately, ATMs are not common yet, so they are sometimes hard to find. Just be sure to do some research and find out if there are any near you.

There are limits on how much Bitcoin you can withdraw. Bitcoin ATMs have daily limits of $25,000, which is good enough for an average crypto holder. As for exchanges, limits can vary and usually go up to $100,000 at max.

Besides, ATMs charge cash-out fees, so whether it’s worthwhile or not depends on the amount you plan to withdraw.

4. Over-the-Counter (OTC) Trading

OTC trading is the best option for high-volume crypto holders. OTC decks support large transaction sizes and usually have customizable terms. However, they usually have high minimum amounts to withdraw, which won’t work for smaller investors.

OTC trading enables direct securities trade between parties, providing access to capital markets for smaller and large crypto-fiat trades. Plus, the OTC market can be complicated for beginners, so it’s more suitable for experienced crypto users.

5. Crypto Debit Cards

These cards are a newly evolving technology, and you can only use them for direct purchases at retail and for cash withdrawals through ATMs. Crypto card works as a usual debit card but all money is from crypto holdings.

This form of payment is a practical way to deal with one's expenses on a day-to-day basis, but fees are involved. Additionally, changes in the currency rate should be taken into consideration while using the cards.

For more info on how crypto cards work, check out our article.

FAQ

How do I cash out my crypto?

You can cash out crypto through P2P platforms, Bitcoin ATMs, or crypto exchanges. Let's explore how each one works:

• Crypto Exchange: Sell crypto on any platform and transfer funds to your bank account.
• P2P trading: Find a buyer by yourself or on the P2P platform, agree on terms, transfer tokens, and receive cash.
• Bitcoin ATM: Send tokens to the ATM’s wallet address, and get cash.
• OTC trading: Contact a broker for large trades.

How to cash out Bitcoin?

As we discussed, you can cash out Bitcoin for real money through exchanges, P2P platforms, ATMs, and OTC trading.

To transfer Bitcoin to cash, you must first sell it for fiat. Then, you can withdraw those funds. You can sell Bitcoin for cash through several methods, but crypto exchanges and P2P platforms are the most widespread and easiest to use.

Availability for Bitcoin withdrawals depends on the platform. You can withdraw Bitcoin anytime with some platforms, but others may have limited hours for processing withdrawals.

The best way to sell Bitcoin for beginners is through a centralized exchange. These platforms are easy to use and they handle matching you with a buyer. But if you're seeking lower fees, P2P platforms can be an option. Be aware that P2P platforms require more effort to find a reliable buyer and may involve some risk.

We also have a guide to finding a P2P trading partner for you to check out.

How do you cash out cryptocurrency with (OTC) Trading?

OTC trading is not for quick cash-outs. The first step is to find a brokerage firm that will find a suitable buyer for your tokens. After the sale has occurred, you'll receive your payout.

How do I cash out my cryptocurrency in my bank account?

To withdraw Bitcoin to your bank account, follow these steps:

• Sell BTC for Fiat Currency
• Link Your Bank Account to The Exchange Platform
• Verify Your Identity
• Transfer Funds to Your Bank Account

Are Bitcoin withdrawals instant?

Withdrawing Bitcoin isn't always instant, because all platforms have different processing speeds. Most withdrawals are completed in a few hours, but some may take longer. Several exchanges let you cash out faster, but you have to pay a special fee for it.

Why is my BTC withdrawal taking so long?

BTC withdrawals can be delayed because they need to be verified by the network first. Transactions with higher fees are usually processed faster. Busy periods on the Bitcoin network can also slow things down.

Why can't I withdraw Bitcoin?

You might be unable to withdraw Bitcoin if there are not enough coins in your wallet for a cash-out with the fee. Opening orders to either buy or sell BTC will prevent you from withdrawing funds until they are settled, too. Similarly, if your account is not fully verified, you cannot withdraw money.

How to cash out of Bitcoin using P2P platforms?

Using P2P platforms to cash out BTC is not complicated. To do that, you should follow these steps:

• Choose a P2P Platform
• Create and Verify Your Account
• Find a Buyer
• Send the trading request
• Discuss the Terms
• Make a deal
• Receive Cash
• Transfer Cash To Your Bank Account

How to cash out Bitcoin Using Cryptocurrency Exchanges?

To withdraw Bitcoin, sell tokens on a crypto exchange, and then transfer the money to your linked bank account. It's a straightforward process that most exchanges make simple. To sell Bitcoin, you should:

• Select the Reliable Exchange
• Complete Verification and Create the Merchant Account
• Link Your Bank Account
• Go to Trading Section and Sell Bitcoin

Next, proceed with a withdrawal and deposit the money in your bank account. Whether you need to pay for your Bitcoin withdrawal will depend on the exchange you’ve chosen. Some exchanges set commission rates that differ between the token type being transferred and the number of tokens involved.

You can read our guide to the cheapest crypto exchange platforms to easily decide which one to use.

How can I cash out my cryptocurrency on ATMs?

A Bitcoin ATM follows the same principle as a conventional ATM machine, but not exactly. To withdraw Bitcoin with an ATM, you’ll need to send your tokens to a QR code generated by the machine. Then, wait for a couple of minutes and take your cash.

How to cash out Bitcoin with low taxes?

Unfortunately, it is not possible to completely exclude taxation. But applying some techniques makes it possible not to be greatly afflicted by taxes. There are the strategies you could try:

• Hold for Over a Year: In the US, crypto holdings are capital gains assets. If you sell Bitcoin after holding it for longer than a year, you’ll get a lower tax rate.
• Consider a Crypto Loan: You may borrow cash where your Bitcoin serves as collateral. Loans are tax-free, so you'll be able to access cash without paying taxes.
• Strategic Spending: Consider using BTC directly for purchases if it's accepted. That way, you’ll avoid a cash-out and taxes.

Step-By-Step Guide To Cashing Out Crypto With Exchanges

There’s an in-depth guide to help you convert and withdraw your cryptocurrencies in the most efficient way.

Step 1: Choosing the Right Crypto Exchange

Not all cryptocurrency platforms are the same. Before picking the one to use, consider factors like security, supported cryptocurrencies, withdrawal methods, and fees.

Step 2: Setting Up Your Withdrawal Method

After selecting the best exchange for yourself, complete the registration on the preferred platform and go through the verification process. An important part of this is usually connecting with your bank account. And it’s crucial to double-check, or else you might have a delay in the future.

Step 3: Initiating the Withdrawal Process

The platform should have a withdrawal section where you will need to state all the details. Choose the crypto you want to sell, enter the amount, and indicate how you plan to withdraw.

Step 4: Verifying Your Identity (if required)

Some exchanges do identity verification for security reasons, especially if you’re planning to withdraw crypto in larger amounts. In order to achieve this, you will need to pass the KYC verification procedure and submit your ID or take a selfie.

Step 5: Confirm and Complete the Withdrawal

At this step, it’s vital to check all the details of your request once again. It includes the amount, the recipient's payment method, and fees. Then, you’ll need to submit the request. Processing time depends on several factors we’ve covered earlier in this article.

Features of The Crypto Withdrawal Process

The withdrawal process is influenced by various factors such as the chosen platform, withdrawal method, and regulations, ensuring a smooth and efficient experience. So, here are the things you should consider when withdrawing your crypto tokens:

• Tax Implications: Depending on where you are, crypto sales may result in capital gains tax. Make sure to do your research or consult a tax professional for specific obligations and reporting requirements.
• Safety Measures: Prioritize security during withdrawals by using reputable exchanges. Don’t forget to enable 2FA and always use strong password practices. Be cautious of phishing attempts and fraudulent activities.
• Exchange Rates: Fees are a variable parameter among different platforms, and we recommend comparing them with other exchanges prior to selling off your crypto.
• Consider Selling Into Stablecoins: Stablecoins are attached to fiat currencies, so they will definitely reduce the volatility and make cash-outs easier.

Did this guide on cashing out cryptocurrencies prove helpful? We'd love to hear your preferred methods for converting crypto holdings to cash! Share your thoughts in the comments below.