A newbie asked me five years ago: Can you convert cryptocurrency into cash?
Though it sounded funny, I smiled and gave him an answer to that question: yes, you can convert your cryptocurrency to cash.
That question popped into my mind today, and I have decided to write an article about this question to make sure that I have answered it,
and publish it on my website to help my readers who have this same type of question rolling in their minds.
So, if you need an answer to this question, thank God you are here already, and I will explain everything you should know about converting your cryptocurrency to cash in this article.
Read also our related post.
How to convert cryptocurrency explained.
Cryptocurrency can be cashed out easily through centralized exchanges such as Coinbase.
Choosing which cryptocurrency and how much you want to sell is easy with Coinbase’s “buy/sell” button.
With Coinbase, you can exchange cryptocurrency for cash quickly. Afterwards, you can transfer the funds to your bank account.
Although Coinbase is one of the most popular exchanges for selling cryptocurrency, it’s probably best to go with whatever exchange you currently use,
if you don’t have custody of the coins yourself. Some of the top exchanges include Binance and Kraken.
Alternatively, you can sell your cryptocurrency directly to another person through another entity.
In most cases, sellers find the best offers through peer-to-peer online platforms, but it is also possible to do it in person if needed.
Using a peer-to-peer exchange, you can sell cryptocurrency online for dollars.
Binance runs a well-known peer-to-peer platform called Binance P2P, which facilitates these transactions.
The platform escrows your crypto after you agree to a trade.
Binance will release the crypto to the buyer once you verify the transaction record in the payment account and ensure you have received the money from the buyer.
Is it hard to convert Bitcoin to cash?
Let me show you about five ways to convert crypto to cash instantly!
Crypto Debit Cards: A Quick Cash Out Option
The BitPay Card and other cryptocurrency debit cards function like traditional debit cards but use cryptocurrency balances rather than traditional bank accounts.
BitPay Card supports multiple cryptocurrencies and offers an effortless way to transform your crypto into USD.
After a quick application process, you can use your crypto like traditional cash.
Pros:
- Swift and straightforward.
- It can be used at ATMs, online, and in-store.
- No need for a bank account.
Cons:
- Primarily for U.S. residents.
- Usual ATM fees are applicable.
Centralized Exchanges: Direct Sales for Cash
Platforms like Coinbase, Binance, and Kraken let you convert Bitcoin to cash seamlessly.
While it’s convenient, especially if you already have an account, the fees can add up. A bank account is also necessary to retrieve your cash.
Pros:
- Simple for those with an existing custodial wallet.
- Many exchanges to pick from.
- Faster than P2P transactions.
Cons:
- Fees for services rendered.
- A Bank account is required.
P2P Exchanges: Direct Transactions Between Users
Unlike centralized exchanges, P2P platforms enable direct transactions between individual buyers and sellers.
Though potentially offering better rates, the process can be more involved and time-consuming.
Pros:
- Generally, there are lower fees than centralized exchanges.
- Ability to negotiate rates.
Cons:
- It may be slower than centralized exchanges.
- A bank account is typically required.
Bitcoin ATMs: Cash Out Anytime, Anywhere
Bitcoin ATMs are specialized machines allowing for both the purchase and sale of crypto. While they offer instant cash-outs, fees can be higher than other methods.
Pros:
- Machines located worldwide.
- No bank account is required.
Cons:
- Fees can be high.
- Availability can be sparse in rural areas.
- Cash limits are based on ATM reserves.
Convert to Gift Cards
If you don’t necessarily need cash, platforms like BitPay let you buy gift cards using Bitcoin and other cryptocurrencies. These gift cards can be used in various popular stores.
Bitcoin Cashout Considerations
Before you convert all your Bitcoin to cash, consider the following pitfalls:
Taxes: If you earn profits from selling bitcoins, you must pay taxes. Considering this when planning your taxes is important.
Any reputable third-party broker exchanges will report their transactions for tax purposes.
Fees: Most bitcoin-to-bank-account methods will entail exchange fees.
Third-party broker exchanges may require a few days to transfer funds to your account.
Do you pay taxes on Bitcoin cash out?
Cryptocurrency is taxed if you sell it for a profit or earn it as cash.
You report your activities in U.S. dollars, which usually involves converting the value of your coin to dollars when you buy, sell, mine, earn, or use it.
Here’s how crypto taxes work:
How your crypto is taxed depends on how it was acquired.
Those who sell cryptocurrency for a profit are taxed on the difference between the purchase and selling prices.
You can exchange one crypto directly for another and pay for goods or services with crypto.
In reality, how crypto taxes are calculated depends on the specific circumstances of your situation. Here’s how it boils down:
If you acquire cryptocurrency through mining or use it to purchase goods or services, that value is immediately subject to taxation as earned income. There is no need to wait until you have sold, traded, or used it before settling with the IRS.
Cryptocurrency can be disposed of by cashing it off on an exchange, trading it for goods, or purchasing services with it.
Whenever the realized value of a crypto exceeds the price at which it was acquired, you will be liable for taxes.
Capital gains may be taxable either long-term or short-term.
As with traditional assets, such as real estate or stocks, investing in or selling crypto has tax implications, says Brian Harris, a tax attorney with Fogarty Mueller Harris, PLLC.
” As values go up and down, you may have a capital gain or loss if you sell or exchange the property,” Harris says.
Is it possible to convert cryptocurrency to cash?
The answer is yes; it is possible to convert cryptocurrency to cash, and you can convert any cryptocurrency into cash at any time, anywhere.
But the issue is that if you are holding a cryptocurrency that has been rug-pulled or devalued to zero, in this situation,
you won’t be able to withdraw such coins and convert them to cash because they have no liquidity.
These are the most important things to consider before converting or withdrawing a cryptocurrency to cash.
Check the coin market capitalization
- Search to discover the exchange in which the coin or token is listed.
- Also, check the market volume or trading volume of the crypto.
How easy is it to convert cryptocurrency to cash
Converting cryptocurrency is one of the fastest ways to interact on centralized cryptocurrency exchanges.
It takes you less than 2 minutes to convert cryptocurrency to cash in the most popular cryptocurrency exchanges.
The best cryptocurrency exchanges to convert different cryptocurrencies directly on the exchange are as follows.
- Binance exchange
- Bybit exchange
Don’t get me wrong. There are other cryptocurrency exchanges out there that can be used to convert multiple cryptocurrencies.
In the two exchanges that I have mentioned here, I have used myself to convert cryptocurrency several times,
and the charges are minimal if you convert the coins on any of the two exchanges above.
Their fees are always low to use the convert option on those platforms.
Here are some simple steps to convert crypto to cash on Binance.
Binance Convert is the fastest way to turn crypto into cash and a simple tool to buy or sell cryptocurrencies with just a few clicks.
It supports many assets and over a few thousand pairs, including fiat currencies. You can easily convert any token amount to another from as low as 1 USD.
You can get a Binance Convert quotation instantly on the website or App.
Conversion prices will be based on market conditions without additional fees.
You can get more competitive quotes for large orders than buying or selling on the Spot market.
How to use Binance Convert on the Binance website?
Before you start, ensure your Spot or Funding Wallet balance is sufficient to cover the order amount.
Check out our guides on purchasing, depositing, or receiving crypto if your balance needs to be increased.
Log in to your Binance account and go to [Trade] – [Binance Convert].
You may also access Binance Convert from your Fiat and Spot Wallet.
Choose either a market or a limit order to convert your assets.
[Market] executes the conversion at the current market price.
[Limit] executes the conversion at the limit price you specify. Even if the limit price is reached, there is no guarantee that your order will be filled.
You may use the funds in your Spot or Funding Wallet. Click [Spot wallet] to switch to [Funding wallet] and vice versa.
Go to the [Market] tab and select the tokens to convert. For example, we are converting USDT to BNB.
Enter the amount of USDT to use, or click [balance], and the system will automatically enter the maximum available amount you can use.
Click [Preview Conversion]. You’ll see the amount you can receive.
If you’re happy with the rate, click [Convert] to confirm your order.
Please note that the quote will automatically refresh after some time to reflect the latest market price, and the amount you can get will be updated.
The transaction will be processed immediately. The converted token will be distributed to the selected wallet.
To view the converted tokens, click [Go to Wallet].
To check the trading statistics of the token you just converted, click [View More].
To use Binance Convert again, click [Trade More].
Conclusion
I have explained thoroughly in this article how you can convert cryptocurrency into cash.
I discussed the exchanges you could use to convert cryptocurrencies anywhere and anytime.
I have also talked about the possibility of converting any cryptocurrency to cash.
I have spent my time explaining that aspect and made it clear that whenever you want to convert any cryptocurrency to cash.
I have mentioned three things to consider before converting your crypto to cash.
One of the three is to check if the coin has been rug-pulled or is still tradable.
Read through this post from the beginning until the end to grab everything without missing any vital points.
Read also our related post.