While some storefronts and companies do accept bitcoin as a payment method, converting your bitcoin into cash – or fiat currency – is still necessary for most other payments.
So, here’s how you can convert your bitcoin and cryptocurrency holdings into fiat money.
Can Bitcoin Be Converted Into Cash?
Yes, you can exchange your bitcoin into a number of fiat currencies, including USD, EUR and GBP. If you do convert your cryptocurrency, there are some things to be aware of.
First, earnings on cryptocurrency are still liable to taxes, with the regulations varying by country. These are worth checking over carefully. In the UK, for example, cryptocurrency is subject to Capital Gains Tax.
Second, even if you do convert your bitcoin, it might not end up as fiat money in your bank account right away.
The withdrawal time again can vary depending on your country and bank, along with the service used to make the withdrawal. These transactions may take between 1-6 working days to process.
How To Convert Bitcoin Into Cash
There are two main methods for converting bitcoin into cash: using a cryptocurrency exchange, and peer-to-peer.
Cryptocurrency exchanges like Coinbase, Kraken and Binance allow you to exchange your bitcoin for any supported fiat currency. To use these exchanges, you will need to link your wallet and deposit your bitcoin into the service, before then exchanging and withdrawing in the currency of your choice.
These exchanges do come with certain conditions, however. Each cryptocurrency exchange will have its own rate of transaction fees, with Coinbase charging 1.5% for an ‘Instant Card Withdrawal’ in the USA.
Exchanges may also impose daily or monthly withdrawal limits on users depending on several factors including account age, payment method, and verification level.
Peer-to-peer (P2P) transactions cut out the need for exchanges, allowing direct transactions between two anonymous users.
To reduce this risk of fraud, sites such as LocalBitcoin allow for you to deposit your bitcoin in escrow – this means the buyer won’t receive your bitcoin until you confirm the payment has gone through.
Regardless, scammers may still attempt to dupe you out of your cryptocurrency, so make sure to remain vigilant and only engage in safe, secure trades. Some P2P sites have rating systems for buyers, too, which are useful.
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