So, you’ve made your millions, and now you want to know how to cash out Bitcoin? Well, this guide will tell you everything you need to know!
This guide will include methods of how to turn Bitcoin into cash such as bank transfer, PayPal and even through cash deposit! I will show you how to withdraw Bitcoins to cash using an exchange (namely, Binance) and through a peer-to-peer exchange. And to make it easier for you, I will also include some helpful images.
By the end of this guide, you will be able to decide which method is best for you.
Cool fact: Did you know that more than $2 billion worth of Bitcoin transactions happen every day?!
Jong-Chan Chung
Venture Manager at Blockchain Founders Group (BFG)
How do cryptocurrencies and Web3 technologies create a more secure internet experience?
Human urges can make classic systems prone to errors, whereas Web3 technologies like the blockchain maintain a single global state across distributed nodes reducing the dangers of a single source of failure (SSOF), flanked by cryptographically verifiable ownership and release of assets.
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Table of Contents
Different Cash Out Methods
There are many things to consider when cashing out Bitcoin. Here are a few:
- Do you want the easiest method, or the cheapest method?
- Do you want the money deposited into your bank account or PayPal?
- How long do you want to wait to receive your cash?
- Which currency do you need to change your Bitcoin in to?
These are some of the questions that you will need to ask yourself. So, read through the following methods on how to cash out bitcoin and then decide which is best for you.
Third-Party Exchanges
Some cryptocurrency exchanges do not allow you to deposit funds using fiat money - however, most do.
This is how it works: you deposit your Bitcoin into the exchange, then, once the exchange has received your Bitcoin, you can request a fiat currency withdrawal. The most common way to do this via a bank (wire) transfer.
To make sure brokers do not break money laundering laws, you will need to withdraw to the same bank account that you deposited with. If you have never deposited fiat on to a broker exchange, then you will more than likely need to make (at least) one deposit first.
This can be annoying, I know… but that’s the way it goes.
If you decide to cash out your Bitcoin using an exchange (such as Binance), then it will normally take about 1-5 days for the money to reach your account. For EU customers, payments are made via SEPA (withdrawals paid in Euros). However, if you want to sell Bitcoin for USD, brokers normally use the SWIFT payment method.
And that’s how to cash out Bitcoin using a broker exchange — skip the next section to follow instructions on how to do this.
However, if you’d prefer the more anonymous & less time-consuming approach, let’s look at how to sell Bitcoin for cash using a peer-to-peer platform!
Peer-to-Peer
If you don’t like the thought of having to wait three days for cashing out Bitcoin, you should consider using a peer-to-peer selling platform like LocalBitcoins.
When selling Bitcoins to other people on LocalBitcoins, you can decide which payment method you want the buyers to use. These include:
- Cash deposit: You can ask the buyer to deposit cash into your bank account. However, you should always ask them for proof of ID and proof of payment before releasing your Bitcoins to them.
- Bank Transfer: You can ask the buyer to send you a bank transfer payment. Before trying this method on how to cash out Bitcoin, be sure to always request proof of ID from the buyer before going ahead. Once you have received the money, you can release the Bitcoins to them.
- Meet in person for cash: You can arrange to meet up with a buyer who is local to you, and they will pay you in cash for your Bitcoins.
P2P selling is safe if you know what you’re doing. However, it’s important to be aware of fraudsters. LocalBitcoins offer a good level of safety because of their escrow service. This keeps your Bitcoins locked until you confirm the payment has been received from the buyer.
I bet you’re still a little confused as to what an escrow is, so let’s use an example:
- John wants to buy 1 Bitcoin. As he is from the UK, he searches for sellers in his country.
- John sees that Mike is selling 1 Bitcoin at a good price, and he also accepts bank transfer as a payment option.
- John sends his request for 1 Bitcoin to Mike, and Mike accepts.
- Mike puts his 1 Bitcoin into the escrow. This holds the Bitcoin until John transfers the money to Mike.
- John transfers the agreed amount into Mike’s bank account.
- When Mike has received the payment, he releases the Bitcoins from the escrow, which is then sent to John’s account.
That’s it! Now you know how to sell Bitcoin for cash using a P2P exchange!
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How to Cash out Bitcoin Using an Exchange
So, now that you know the difference between the two favored methods, I will now show you how to withdraw Bitcoins to cash using crypto exchanges!
Binance is the most popular exchange platform for buying and selling Bitcoin. They tend to process more Bitcoin transactions than any other exchange and have a massive customer base of over 28 million.
- Withdrawal Methods: Binance lets you sell Bitcoins for cash, which you can then withdraw into your bank account. You can only cash out your Bitcoin into a bank account that you have already used to buy cryptocurrency on Binance. So, if you haven’t done this yet, I recommend purchasing a small amount of cryptocurrency first.
- Fees: The fees depend on the country that your bank is located in. For example, if you want to sell Bitcoin for USD, a SWIFT transfer is $15.
- Cash-out times: Withdrawal times also depend on the country where your bank is located. In general, withdrawals normally take between 2-4 working days.
Turn Bitcoin into Cash Using Binance
To make things a little easier for you, I will now show you how to cash out Bitcoin at Binance.
1. First, you will need to open an account with Binance, pass the KYC checks, link your bank account, and make a deposit. If you need help on how to do this, view our guide here. If you have already done this, proceed to step 2!
2. Once you have set up your account, you will need to send your Bitcoin to your Binance Bitcoin address! To do this, from your dashboard, click the "Deposit" button, select Bitcoin, and then the network which you'd like to receive your coins through (in most cases, it'll be the standard BTC network). You will then be shown your Binance Bitcoin wallet address. This is the address you need to send your Bitcoin to.
3. Once you are all set up, hover over Buy at the top-left of the page, and select Credit/Debit Card.
4. Next, click on Sell.
5. There will also be a withdrawal limit. Since you have already verified your account, your limits will be quite high. However, if you need to increase this, click on Identification on your Binance dashboard, and follow the additional verification instructions!
6. Before you can make the withdrawal, you need to exchange your Bitcoin for your local currency. In my example, I am exchanging Bitcoin to USD. Enter the amount of Bitcoin that you wish to sell, and the fiat currency equivalent will update.
7. Once you click on Continue, after a few confirmations, your funds will be transferred to your credit/debit card - it's super-quick, and also very convenient!
Congratulations! You now know how to turn Bitcoin into USD, EUR, and other fiat currencies using Binance! Don’t forget, there are many other brokers that you can use. Another popular choice for Bitcoin sellers is Kraken!
Kraken is a popular exchange that allows fiat currency deposits and withdrawals. It has been around since 2011, and processes the most Bitcoin to Euro transactions. However, they also support other major currencies like USD, CAD, and JPY!
- Withdrawal Methods: If you want to turn your Bitcoin into cash with Kraken, you can withdraw to your local bank account.
- Fees: The withdrawal fees at Kraken are very low. For example, a SEPA cash out is only €0.09! And if you want to sell Bitcoin for USD using a local US bank, it’s just $5.00!
- Cash-out times: It takes between 1-5 working days for Kraken withdrawals to reach your bank account.
Turn Bitcoin into Cash Using a Peer-to-Peer Exchange
Now that you know how to cash out Bitcoin using a broker, let me show you how to do it using a peer-to-peer exchange. There are a few to choose from, however, the one I most recommend is LocalBitcoins.
LocalBitcoins was created in 2012 and now supports almost every country in the world. So, no matter where you are from, you should be able to find buyers to sell your Bitcoin to.
The great thing about P2P is that you can request any payment method you want. Here are some examples of the different payment methods available on LocalBitcoins:
- Local Bank Transfer
- International Bank Wire
- PayPal
- Skrill
- Payoneer
- Western Union
- Gift Vouchers
- Web Money
- Bank Cash Deposit
- Neteller
Sellers who know how to cash out Bitcoin can also choose the price they would like to sell their Bitcoin for. You can do this by creating an advertisement, which will charge you a fee of 1% of the total sale.
However, if you sell to a buyer that has listed the price they want to pay, there are no fees.
There is also a rating system like eBay, where you can leave feedback for the buyer or seller. This helps you to remain safe when choosing a buyer. If you are a beginner, I only recommend selling to buyers who have 100% positive feedback.
Local Bitcoins allows you to stay anonymous, too (when choosing such payment methods as web money or gift vouchers), especially if you also use a reliable and safe VPN to secure your connection. However, some sellers decide to ask new buyers (those who have no feedback) to supply identification.
Here’s a step-by-step guide on how to turn Bitcoin into cash using a peer-to-peer exchange:
How to Cash out Bitcoin Using LocalBitcoins
1. First, you will need to open an account at Local Bitcoins. You can do this by clicking here.
2. Choose a username and a strong password. You also need to enter and confirm your email address.
3. Once you are logged in, click on Sell Bitcoins at the top of the page.
4. Then you need to choose the country where your ideal buyers are located. I recommend using your own country (of course), however, this is up to you. In this example, I have selected the UK. You also need to enter the amount of Bitcoin you wish to sell.
5. As you will see below, there are many different ways to cash out your Bitcoin.
6. In this example, I will show you how to cash out Bitcoin using PayPal. As you can see, the buyer has a 100% feedback rating, and has completed more than 1000 trades! This is a sign of a serious, legitimate buyer.
7. Confirm the amount of Bitcoin you want to sell and enter your PayPal email address. Then click on Send Trade Request.
8. Your buyer will then receive a notification to say that you would like to sell your Bitcoins to them. Once they accept, you will then send your Bitcoins to the LocalBitcoins escrow (I explained an escrow earlier, remember?). So, the buyer will not receive your Bitcoins until they have paid you, and you confirm they have done so.
9. The buyer should contact you to let you know that the funds have been sent. Check that the funds have arrived in your PayPal, then click on Payment Received, and you're finished.
Congratulations! You now know how to cash out Bitcoin using a P2P exchange.
Once you become more experienced with Local Bitcoins, you can practice selling using different payment methods. The good thing is, some payment methods allow you to sell your Bitcoins at a higher price — so it’s worth getting used to.
It is also a good idea to set up an advertisement. Even though it will cost you 1% in fees, you can set up your own price and choose your own payment method. In this case, you will receive a notification from buyers when they want to buy from you.
LocalBitcoins is just one of the P2P exchanges that allow you to cash out your Bitcoin — there are many others. The important thing to remember is that the exchange has an escrow, and NEVER send your Bitcoin to a buyer before they have paid!
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Conclusions
If you have read this guide from start to finish, you should now know how to cash out Bitcoin! We have shown you two different methods — the crypto exchange way (Binance, but, it works almost the same with Kraken, Coinbase, Kucoin, and any other top-tier exchange), and also the peer-to-peer way.
They both have their advantages and disadvantages. Binance can be more convenient and safe for beginners, whilst LocalBitcoins allows you to remain anonymous and sell at a higher price.
So, which did you prefer? Are you going to use a broker for cashing out Bitcoin, or a P2P exchange?
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