When you have some amount of Bitcoin, and this is your first trading experience, there might be multiple questions in your mind. Well, if you are confused on to finding when exactly and how to cash out Bitcoin. Since the value of Bitcoin keeps increasing most of the time. However, you can make real-world use of your BTC only when you are able to cash it out.
But the lack of knowledge on how to do that can leave you baffled. Hence, if you wish to know more about converting crypto to cash, then this article is just for you. Here, we shall help you with all the right steps that you must take in this scenario.
When is the right time to cash out Bitcoin?
Timing when to cash out your crypto is not an exact science. It is a mix of market data and personal judgment. You may decide to sell some crypto after prices rise a lot. For example, when Bitcoin reaches new record highs due to big news like ETF approvals or halving events, many investors lock in profits before prices possibly fall again. Some people who bought Bitcoin around $20,000 held it as the price grew to $100,000 or more, then sold portions slowly to buy property or invest in stocks instead of selling everything at once.
On the other hand, if the market starts looking negative, prices start falling everywhere, large investors start selling heavily, and fear starts to spreading. In this case, it may be smarter to cash out before prices drop further. Besides that, personal needs also matter. You might sell crypto if you need money for emergencies, education expenses, or to rebalance your investment.
Method 1- Cash out crypto using centralized exchanges
There are some centralized exchanges that are considered to be the go-to exchange for cashing out your Bitcoin. Such platforms allow you to enjoy instant trades, deep liquidity, and direct cash transfers to your bank account. Cashing out from an exchange requires you to have an account on this exchange beforehand.
- The first step is to create an account on an exchange (if you haven’t already).
- Now, fund your account with BTC.
- You can also sign in to an existing account on any exchange.
- Now, go to its “Trade” tab and then select the trading pair.
- It should be, most commonly, BTC to USDT.
- After that, you can sell your USDT for USD on the same exchange.
- When you receive USD, you can withdraw it to your bank account using ACH or wire transfer.
Method 2- Sell BTC for cash on a peer-to-peer exchange
Another way through which you can cash out your Bitcoins is to exchange them from another buyer on a peer-to-peer exchange. Though the process may take some time, it is usually considered a safe and effective method cash out Bitcoin. Moreover, the fees you need to pay are also pretty low. Here’s what the process looks like:
- First of all, you must create an account on a peer-to-peer exchange and verify it.
- You can choose one of the platforms, such as Binance P2P, Paxful, or Hodl Hodl.
- Time to move your BTC from your personal wallet to the P2P/escrow wallet.
- You may now create a listing or choose from an existing buyer.
- When a buyer is interested in buying your BTC, you’ll be notified about the same.
- The interested buyer will transfer cash to your chosen payment method.
- Once you have received the payment, you can release your BTC afterwards.
- For this, click on the “Release BTC” option, and the buyer will receive BTC very soon.
Final Note:
Please note that if you are converting BTC to USD, it is taxable and hence must be reported to the Internal Revenue Service (IRS). Besides that, there are some safety tips that you must keep in mind if you are cashing out on the peer-to-peer platforms. First of all, you should trade only with high-rated traders and never move conversations outside of the trade.
FAQs:
Which exchanges are the best to cash out BTC in the US?
The most popular exchanges are Coinbase, Gemini, and Kraken, which allow you to sell BTC for cash.
How long does it take to receive cash after selling BTC?
After you withdraw BTC for cash, it usually takes 1 to 3 business days if you have used the ACH transfer method.
Do I need to pay taxes for cashing out Bitcoin?
Yes, selling BTC for cash is a taxable event, which means you must report it to the Internal Revenue Service (IRS).
Can I cash out BTC instantly?
You can use debit cards and crypto ATMs for instant Bitcoin withdrawal. However, this calls for higher transaction fees.
