You bought Bitcoin, saw its value spike, and now you want to enjoy the gains. One of the best ways to do this is to convert your BTC into cash because not all retailers accept payment in Bitcoin.
In this guide, we will discuss all ways to cash out Bitcoin, along with their pros and cons, to help you choose the best option for you.
How to withdraw Bitcoin – Quick overview
Before we give a detailed analysis of all ways to cash out Bitcoin, here is a quick overview of each:
- Sell Bitcoin through a crypto wallet: The easiest and quickest way to sell Bitcoin is directly through your crypto wallet app.
- Sell Bitcoin through a centralized exchange: You can use a centralized exchange (CEX) to easily trade your Bitcoin for other cryptocurrencies or fiat currency.
- Sell Bitcoin through a decentralized (crypto) exchange: You can also use a decentralized or a peer-to-peer exchange (p2p) exchange to sell Bitcoin or other crypto holdings.
- Use a Bitcoin ATM: Similar to traditional currencies, there are Bitcoin ATMs, which offer a quick and straightforward way to convert Bitcoin to fiat currency.
How to cash out Bitcoin – A closer look
Now that you have an idea of how to withdraw Bitcoin, let’s have in-depth look at each of the above ways.
1. Sell Bitcoin through a crypto wallet
Wallets work like bank accounts, storing, managing, and allowing users to sell Bitcoin directly in exchange for fiat currency within the wallet app itself. Selling Bitcoin through a crypto wallet is easy and quick.
All you need to do is open your wallet app and transfer Bitcoin into the wallet (if the wallet doesn’t already have your Bitcoin). After this, you need to select the ‘sell’ option and enter the Bitcoin amount you want to sell. Lastly, confirm the transaction and the amount will be transferred to your linked bank account.
If you don’t already have a wallet app, you can choose from several, such as Binance Wallet, ByBit Wallet, Bitbox, CoinSpot, Ledger, and more. These wallet apps offer transparent transaction fees, flexible selling limits, competitive rates for Bitcoin transfers, and high security.
Pros
- User-friendly and convenient.
- Flexible limits allow users to withdraw from a few hundred to thousands of dollars.
- Full control over funds.
Cons:
- More susceptible to hacking than exchanges.
- Lack of advanced trading features.
2. Sell Bitcoin through a centralized exchange
Selling Bitcoin through a centralized exchange (CEX) is an easy option if you are already using the services of a CEX and your crypto holdings are in the custodial wallet. A CEX basically allows users to trade Bitcoin for other cryptocurrencies or fiat currency.
Selling Bitcoin through a CEX is simple. All you need to do is set up an account with a good CEX, such as MEXC, OKX, Kraken, or Coinbase. Then, select the Bitcoin amount you want to sell, agree to the sell rate, and that’s it.
Before selecting a CEX, you must know about its transaction fees. Usually, an exchange charges a crypto transaction fee, as well as a service fee.
For instance, on MEXC, the withdrawal fee for Bitcoin is 0.000028. The minimum withdrawal amount is 0.0001.
Pros
- Simple and quick.
- Availability of advanced trading tools.
- Many exchanges to choose from.
Cons:
- Users need to pay transaction fees and service fees.
- No control on private keys.
3. Sell Bitcoin through a decentralized exchange
A decentralized exchange (DEX) is a peer-to-peer (p2p) exchange in which transactions occur between two individuals. In a p2p exchange, buyers and sellers transact directly, unlike in a centralized exchange, where all transactions go through the exchange.
If you sell Bitcoin through a p2p exchange, you pay fewer fees than a CEX transaction. Also, you set the sell price, unlike in a CEX transaction where you sell on market rates.
Once you and the buyer agree to the sale terms, you need to transfer Bitcoin directly from your wallet to the buyer’s wallet. You will then receive the money in your bank account, usually through PayPal.
Pros
- Fewer fees.
- More control over sale terms.
- Flexible payment methods
Cons:
- High counterparty risk.
- It may take more time to sell than through a CEX due to less liquidity in p2p exchanges.
4. Use a Bitcoin ATM
Similar to usual ATMs, we now have Bitcoin ATMs in many cities around the globe. They are a quick way to sell Bitcoin for cash, especially if you don’t have a bank account.
When selling Bitcoin, the crypto ATM first creates an invoice detailing the rate. After agreeing to the rate, the Bitcoin ATM provides you with a QR code to send your Bitcoin. Once the transaction is confirmed (usually a couple of minutes), the machine gives you the cash. You can also buy Bitcoin using an ATM.
Though Bitcoin ATM is a quick and easy way to receive cash, their fees could be very high compared to other ways to cash out Bitcoin. And, if you are in a rural area, finding a Bitcoin ATM could be a challenge. Several Bitcoin ATM locators are available online that can help you find a Bitcoin ATM near you.
Pros
- Quick, easy and convenient way to sell Bitcoin.
- No need for a bank account.
Cons:
- High transaction fees.
- Finding a Bitcoin ATM near you could be difficult.
Methodology
This guide was put together by a panel of our cryptocurrency experts, who possess deep knowledge and experience in crypto. At least one member of our panel has direct experience withdrawing Bitcoin using each of the methods mentioned above.
We also conducted thorough research to ensure that all information and data is accurate and up-to-date.
