In 2017 alone, we have seen bitcoin and other cryptocurrencies experience meteoric rises. If you’re one of the fortunate who had the foresight to invest in cryptocurrencies, you will probably want to know how to cash out cryptocurrency.
One of the most attractive features of cryptocurrency is that it is decentralized, which means there are no gatekeepers of the cryptocurrency-based financial markets. There are a number of ways you can cash out cryptocurrency and enjoy the benefits of your investments.
In fact, it actually makes sense to cash out at this point. Cryptocurrencies have been in a sustained bull market since 2015. Three years of non-stop gains are not unheard of but eventually, people will start to take profit, and this will result in some selling and corrections in the markets. Actually, we have seen some short-term selling in the markets since the start of 2018.
How to Cash Out Cryptocurrency
As we mentioned earlier, bitcoin alone appreciated by over 10,000% in the previous three years and over 2,000% in 2017. Based on these numbers, it makes complete sense to cash out, enjoy some of those gains and wait for the period of market distribution to end and ideally get back in the market once prices normalize a bit.
So how to cash out cryptocurrency? There are a number of ways you can cash out of cryptocurrencies, let’s go over each of them one by one. It is important to remember that no one particular method of cashing out is superior to the other, each has its own unique advantages and disadvantages, and you will probably want to choose the one that suits your situation and needs.
First and foremost we have the online cryptocurrency exchanges. If you’ve invested in cryptocurrencies, chances are you’ve had some experience dealing with the exchanges. These exchanges are similar to stock market exchanges and are fairly simple to use.
One important thing to remember is that these exchanges don’t impose any limits if you’re withdrawing cryptocurrencies. However, if you sell your cryptocurrencies and wish to withdraw cash to your bank accounts, you will face some limitation such as the total amount you can withdraw within a given period of time.
The reason these limits exist is to comply with international anti-money laundering (AML) rules, without which they would be unable to get banking services. So if you wish to directly transfer cash to your bank account, you will need to provide the exchange with some personal information to verify your identity. Its similar to how banks require some information to open a checking account. The only difference is that you need to verify your account to withdraw cash and not to open an account.
Once you’re provided documentation to prove your identity, it takes no more than a week to get your account verified. After that, you can place a request with the exchange for a withdrawal. All withdrawals are processed within five working days.
Aside from a wire transfer directly to your bank account, you can also choose to withdraw using debit or credit cards. This might not be true for all exchanges, but some exchanges limit card withdrawals to the same card that was used for depositing cash. This a security measure used to prevent someone from hacking and stealing your capital.
A card withdrawal will fund the bank account that card is linked with. Card withdrawals are supposedly quicker, but in addition to paying a withdrawal fee to the exchange, you will also pay a transaction fee to the card issuer.
There are a number of peer-to-peer marketplaces that can be used to buy or sell bitcoins. LocalBitcoins is by far the most popular and well-known cryptocurrency P2P marketplace. In such markets, you are personally dealing is with another individual. So unlike an exchange, you can even negotiate the price.
The service provider serves as an intermediary and provides escrow services to prevent fraud. The downside of using such marketplaces is that you could potentially end up with an unfavorable price if you’re not careful. On an exchange, you simply can’t pay extra when buying a cryptocurrency. The exchanges are set up in a way that you will always get the best prevailing market price.
On a P2P marketplace, you will have to go through the listing of buyers and choose the price you believe is fair depending on the market price at that time. You could also list your intention to sell at the price you believe you would be willing to accept. Once you’ve found a buyer for your cryptocurrency, you can decide on the mode of payment.
Since P2P marketplaces are not like exchanges, you have a number of options when it comes to the mode of payment. You can ask to receive money through PayPal or anything else that is convenient for you.
Cryptocurrency ATMs can be found in most major cities around the world. As far as withdrawing cash is concerned, they work just like most conventional ATMs. You slip in a cryptocurrency ATM card and withdraw the amount of cash you need. The ATM service provider would sell the relevant amount of cryptocurrencies and give you the equivalent in cash.
Cryptocurrency ATMs are excellent for instant exchange of cryptocurrencies for cash. The process is simple and seamless and takes no more than a few seconds. There are some downsides you should know. They are exorbitantly expensive. For the convenience of instant crypto to cash conversion, they charge really high fees. Worse of all, you will also get a surprisingly bad exchange rate.
The costs of using a cryptocurrency exchange will go down as the service providers achieve some degree of scale. But until then, you can expect to pay incredibly high fees for the convenience of instant cryptocurrency to cash withdrawal.
Crypto Investing Pro
Cryptocurrencies are a relatively new technology and, despite the fact that it hasn’t been around for even a decade yet, its adoption rate has surprised even the most overt optimist working in the sector.
Because of its meteoric rise, people all around the world have started getting exposure to this new medium of exchange and store of value. However, there are not many legitimate sources of information where one can go and learn everything they need to learn about cryptocurrencies.
Luckily though, a few enterprising individuals have taken the initiative to achieve just that. Crypto Investing Pro is an education website that is designed to help complete beginners understand how cryptocurrencies work. It is by far the most efficient way to learn everything you need to in order to understand how to safely invest and use cryptocurrencies in the highly digitized world we live in.
As you can see, cashing out your cryptocurrency investments isn’t particularly difficult. You also have a few options to choose from. As mentioned earlier, no one particular method of cashing out is superior to the other. Understand all of the pros and cons and choose the one that suits your situation.