Investing in cryptocurrencies has never been as easier as it is nowadays. With just a few clicks on your mobile phones or computers, you can invest or trade your favorite cryptocurrencies. But what about when you need to sell them and cash out your investment into fiat currencies? Earlier, it used to be very cumbersome to withdraw your money. But now the process has become as seamless as investing in crypto is. There are a lot of options available to you in the form of direct-to-bank transfers, crypto cards like a crypto debit card, etc.
And in this article, we bring you the best ways to make a swift and efficient cryptocurrency withdrawal.
Using a crypto exchange
If you use a centralized cryptocurrency exchange to buy/sell or trade cryptocurrencies, it is the best way to cash out. Since most centralized exchanges are required to conduct a KYC verification for their customers, they can be very easily linked to your bank account as well.
You can use your bank account to fund your exchange wallet and buy tokens using those funds. Similarly, you can sell your holdings and transfer funds directly to your bank account using the exchange.
Using a crypto debit card
Crypto cards are of two types: a crypto debit card and a crypto credit card. A cryptocurrency credit card can’t be used to make crypto withdrawals. But using a crypto debit card is an effortless way to use your cryptocurrency holdings as fiat currencies.
You need to connect your cryptocurrency debit card to your wallet having your cryptocurrency holdings. Once it is done, you can use the card to make payments at any point of sale directly without having to convert your assets to fiat currencies manually. The conversion process occurs automatically at the time of payment. The majority of these cards are issued in partnership with Visa or MasterCard.
Using a cryptocurrency wallet
A lot of the major cryptocurrency wallet providers have an in-built crypto exchange. And on top of that, the wallet providers like Trezor, Ledger, etc., allow users to convert their assets directly into fiat. This fiat currency can then be transferred easily into the bank account using third-party service providers like Simplex, etc.
While the process of cashing out cryptocurrencies using a wallet is pretty easy, it is not available in most software wallets. Moreover, the fees charged for converting cryptocurrency to cash directly using wallets can be as high as 3-5 percent.
Using an online broker to sell
The number of people trading cryptocurrencies on a day-to-day basis has grown by leaps and bounds. And as a result, a majority of online broker firms globally have started offering cryptocurrencies as a part of their tradeable asset basket. You can easily buy or sell your favorite cryptocurrencies using these brokerage firms such as Robinhood, eToro, etc.
It should, however, be kept in mind that brokers don’t allow you to hold your tokens in crypto wallets or on exchanges. The tokens that you can sell on these brokerage apps and websites must only be bought from these apps. But it shouldn’t be an issue as they offer almost all major cryptocurrencies, and the trading fees are only around 1%.
Using a Bitcoin ATM
A Bitcoin ATM is different from a Bitcoin crypto card. You can sell your assets directly for fiat using such a card; the same is not the case with an ATM. When you wish to sell, the machine sends you a QR code. You have to send Bitcoin to this address on the QR code. The BTC is converted to cash, and it is dispensed out to you.
ATMs of this kind are propping up all over the world. But a major shortcoming is the time taken to process the transaction and the high fees charged by them. Hence, it is better to go for a crypto wallet debit card instead.
Using the money transfer app
Some popular money transfer applications such as PayPal, Venmo, Cash App, etc., allow users to buy, sell, or hold cryptocurrencies. Once you’ve brought your favorite digital assets using these apps and want to cash out for a profit. You can do so in just a few steps.
Remember that these apps do not allow making payments in crypto and only support buying, selling, or holding. You can’t transfer your holdings from wallets or exchanges to these apps and cash out.
Convert one cryptocurrency to another and withdraw
You can withdraw the major tokens, such as BTC, ETH, DOGE, etc., directly from the exchanges to your bank account by converting them to fiat. A lot of newly listed tokens can not be traded for fiat currencies.
Hence, in this case, you will need to convert these assets into another cryptocurrency like BTC or ETH before cashing them out for the fiat currency of your choice. You can also convert your assets into stablecoins such as USDT, USDC, etc., and cash them out through the exchanges.
Cashing out your cryptocurrencies is an integral part of any cryptocurrency investment strategy. Knowing when to buy and sell are the two prudent ways to make money using crypto. And given the state of the markets right now, many people might be tempted to cash out. Finding the cashing-out method that perfectly suits your requirements also important, as you don’t want to end up paying huge fees. While cashing out, have a look at the tax implications. Depending upon whether you’ve made a profit or loss, you would either have to pay taxes or get a tax deduction.
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Oh I forgot to add….
there was no VAT in them days.
Of-course our fckn heebie friends came along n fckd that.
I know nothing about Bitcoin….but
Here,s the thing…..
When i lived in Holland…..1975-80….I could have an account in gold.
In other words i could walk in to my bank and place 500 guilders
either in my normal account or in a gold account.
The weight bought in gold was displayed on my receipt and the full
balance on my account as…..eg…0.65874 kg
I could transfer between accounts according to the price of gold at the moment of exchange.
Yes there were charges but minimal.
I used to buy physical gold kruggerands in holland and go on holiday in spain
and could cash them…(avoiding all the currency exchange BS.)
Sometimes gold increased…etc.
In all it was easy and convenient.
I understand similar currency exchange was available in Singapore….
told me by friends.
This bitcoin exchange system by comparison seems very complex and expensive compared to the above.
It doesnt rock my boat…
Maybe I am just stupid….