Bitcoin, and other forms of cryptocurrency, have been on the rise for the past several years. They are new and exciting, so plenty of people have jumped right into them, without really fully understanding what they are getting into.
Trading in cryptocurrency is comparable to trading on the stock market, but it’s a different type of asset. Everything is digital, and how you invest or trade is sometimes limited or challenging. Getting into crypto is easy, but what about when you need to liquidate or get out?
Maybe you need some cash, and you need it sooner rather than later. When it comes to popular brands of cryptocurrency, these are typically pretty easy to liquidate, and then cash out. Ultimately, it will depend on the cryptocurrency you hold, and the demand for it in the market.
The good news is that there are several options to sell and cash out. However, not every option will be available on every platform or type of currency, so keep that in mind.
Take a look at this guide that walks you through the various options on how to sell your crypto and cash out.
Use a Crypto Exchange Platform
With cryptocurrencies becoming more and more popular, it has become much easier to cash out in most cases. Again, this will depend on the crypto that you hold so keep that in mind. One of the best and most reliable ways to cash out is through an exchange platform.
The best way to describe this is by referring to trading platforms. There are several different exchange platforms to choose from.
Every platform will work a little bit differently overall, but apps like Coinbase make it very simple and provide you with step-by-step instructions. In fact, Coinbase even allows users to sell crypto and then immediately withdraw the funds before the process fully settles in some cases.
On a platform like this, you will simply head into the app, choose to sell, and then go from there. Walk through the process of completing the sale, so you can turn that cryptocurrency into cash.
Once the sale of crypto settles, you can then make a withdrawal of the cash that comes from liquidating your cryptocurrency.
The benefit of using an exchange like this is the fact that you have access to a multitude of different cryptocurrencies all in one place. However, if you have just one holding and a wallet already in place, you can go directly to the source and likely save on some fees.
To use a cryptocurrency exchange, you will need to already have an account in place, or be willing to go through the process and then get your crypto wallet and payment methods linked. These steps must happen before you can use the exchange to sell your crypto and subsequently withdraw the cash from doing so.
Use a Person to Person Sale
The direct exchange platforms are nice because they are monitored and secure for the most part. However, you could always skip the middle man and simply trade directly with another individual to sell your crypto.
This person to person direct trade can be with an individual, or with an entity of some sort that wants the crypto you have in your possession. Some of the biggest investors involved in Bitcoin mining, or other crypto mining, are always on the lookout for opportunities to pull in unwanted crypto on the market.
If you want to do this type of sale of your cryptocurrency, you still may want to access a platform to do so. The platform adds some security, rather than just a handshake or agreement that doesn’t offer any protection for you.
Those platforms then look at exchanges to find you the best deal, and allows you to complete the transaction digitally.
You don’t have to use an exchange for this, though, which is why it gets its own label here. It’s known as P2P selling, or person to person. There are specialized platforms dedicated to helping people connect for this purpose.
You can trade your crypto for cash here, or you could do the opposite and find crypto to purchase. Some people even exchange types of crypto in like values. It’s like a marketplace with plenty of people in the market.
Different platforms offer the cash payouts in different ways, so be sure to check out these details if you go this route.
On that same note, some people prefer to have face to face transactions, and that is possible too. With some P2P platforms, you can facilitate this directly, which is really the best way to do so to protect yourself.
To use in-person sales, you will need to have a crypto wallet, and both parties will need a basic understanding of how to complete the transactions through whatever their holding space may be. You can transfer this individual the crypto, and they can provide you payment on the spot for doing so.
Try a Cryptocurrency ATM
Another option is to use a cryptocurrency ATM. This truly is an ATM, which connects directly to your crypto wallet, if you have a compatible cryptocurrency. Bitcoin was the first to jump on this, and there are many well-known Bitcoin ATMs out there. However, other cryptocurrencies are available in this way too.
These ATMs are located throughout the world, and are not just limited to one country or location. The key will be determining whether or not there is one anywhere near you, or whether this option will be an inconvenience.
The ATMs allow you to buy or sell your cryptocurrency directly, although there are some ATMs that are limited and may only allow buying or selling, but not both.
Be sure to always watch for that to ensure you are visiting an ATM that accommodates your needs.
The challenge to using a cryptocurrency ATM is finding one that is compatible with your cryptocurrency, or that doesn’t have restrictions that will keep you from completing a transaction. These ATMs have to follow specific requirements and regulations, which may prohibit your transaction.
In most cases, you will be required to have an account with the associated cryptocurrency in order to be able to complete a transaction. For example, if you use a Bitcoin ATM, you likely will need a Bitcoin account to be able to sell your crypto there.
This kiosk can be helpful, just know that there may be limitations that make it not a good resource for your needs. It simply just depends on all of the details. These are becoming more readily available, so hopefully, these details will continue to improve over time.
Finally, when using Bitcoin ATMs, you will be required to provide identification information on the ATM. You also will be paying fees, and this happens to be one of the highest fees for a sales transaction
The cash is quick, but the fees might take quite a chunk. It’s up to you to determine whether the quick access to cash is worth the cost.
Use a Crypto Broker
The crypto broker is slightly different from an exchange, but works very similarly. More and more banks and brokers are opening up to the idea of cryptocurrency and supporting transactions that involve crypto as well.
That being said, if you own crypto, you likely are already associated with a broker. For example, if you own Bitcoin, then they are a broker for you. On another note, you may have used an app like Webull to purchase cryptocurrency, and in that case, they are your broker.
These brokers and platforms allow you to trade in cryptocurrency, just like they support trading various stocks and other investment options. This allows you to truly have your investments all in one place, and be able to take care of any financial business right there.
If you are affiliated with a crypto broker, they are a prime resource for you to sell your crypto, and then be able to cash out. They will have specific trading protocols that allow you to walk through a sale, and most likely make it easy to do so.
These online brokers also have some of the lowest fees for your crypto trading needs.
These online brokers have apps and website platforms that are simple. You would go into the platform, choose your holding, and then go through the motions to sell. The exact steps might vary by broker platform, but you get the gist of how it works.
Much like using an exchange, you may have to wait for the sale to settle and process before you can then cash out the funds. In most cases, this takes less than 5 days, but it will depend on the broker and the cryptocurrency involved.
The only thing to be aware of is that you also will need a crypto wallet to work with when you use a broker like this. They allow you to incorporate the wallet into your broker portfolio.
Crypto Debit Cards
So much has changed in the crypto world in the few years that it has been around. The market isn’t going away, and they continue to look for ways to make it more accessible and convenient for everyone.
We see that in the use of exchange platforms, as well as the ability to use crypto debit cards to access cash. This is still a limited option, but we think the popularity will continue to grow, bringing more options to the table for people to access their crypto and funds.
The debit card doesn’t work alone. Typically, it’s associated with a crypto exchange, but it gives you a different way to access the funds. This is another feature that platforms like Coinbase offer their customers.
The way it works is you use the debit card, and the underlying exchange will convert the crypto in your account to accommodate the use of the card. You can use this debit card for everyday purchases, but they also allow you to access cash from a traditional ATM.
How much cash you can withdraw will depend on your cryptocurrency exchange and their rules for cash withdrawals on the debit card.
Be prepared to pay a fee with your exchange company, as well as a fee at the ATM for the withdrawal.
While there are crypto debit cards specifically tied to an exchange, you can also find generic debit cards now as well.
Wallets and Money Transfers
Finally, you can use resources like money transfers or crypto wallets to help you sell your crypto and then cash out as well.
Your crypto wallet is designed to store and manage your crypto holdings. When you sign up on an exchange, or a broker platform, you pull in your crypto wallet to make transactions. It’s basically a secure storage or holding place for these digital assets.
But the nice thing about crypto wallets is the fact that they typically have exchanges at your fingertips. You don’t necessarily have to connect with another direct exchange in order to complete your transaction. Not all wallets offer this, so be sure to check with your capabilities to know for sure.
In a similar fashion, some of the popular money transfer apps also allow you to exchange crypto through them. This is a new feature of apps like PayPal. Here, you can hold your cryptocurrencies, buy crypto, and also sell it if you need to. Then, you can cash out just like you would anything else you do in PayPal.
Details to Consider When Selling & Cashing Out Crypto
Now, before you make that final sale on crypto, there are some details you might want to consider. Making the sale and cashing out is really easy, but it may have some implications to be aware of.
Take a look at these to be aware.
Fees
Chances are you are going to pay some fees, no matter which method you decide to use for cashing out. How much you pay in fees will depend on how you choose to cash out, as well as the cryptocurrency, the size of transaction, and even the platform being used.
They all have their own fee structures, but you should be able to easily find those details before you sell the crypto. Just be aware that the net cash you receive might be less than the “value” because of trading values, as well as the fees that are charged for your transactions.
You may have fees for selling the crypto, as well as cashing out the crypto. It simply depends on the platform used.
Tax Implications
In addition to fees, there is the possibility that selling crypto could lead to tax implications as well. Your crypto is a form of property, and when you sell it, most countries look at this as a gain. It’s similar to if you sold property, or even stock that you hold.
This gain could cause you to owe taxes, and sometimes tracking gets a bit complicated.
The best way to be aware of or familiar with the potential tax implications is to work with a tax professional.
What About Your Strategy?
Finally, as you plan to sell your crypto and take cash, consider what it will do to your investment strategy. In some cases, this won’t matter to you, because you simply need the cash. However, it might cause you to take pause and consider whether your strategy needs to be adjusted as well.
When you sell cryptocurrency, there is an opportunity cost to doing so. You could be taking a loss at the time, or you could be missing out on future upsides. Crypto can be established in such a way that it provides passive income or grows within your portfolio.
There is no right or wrong answer in regard to your strategy. Remember it is YOUR strategy. However, you should be familiar with the impact it may have on your portfolio so that you can make a fully-informed decision.
Final Thoughts
There was a time when selling cryptocurrency was challenging and complicated. But with the popularity and rising demand, it typically is a simple process. When you want to sell your crypto and cash out, you have the ability to do so right at your fingertips.
Just be familiar with the potential for fees, the changes to your overall portfolio, and any potential delays to get your cash for processing times. Use any of these methods to get cash in your hands when you need it most.
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